Rheinmetall "Quo vadis Rheinmetall?" (Buy) Weier

Research evidence excerpt

Rheinmetall "Quo vadis Rheinmetall?" (Buy) Weier

sable for Rheinmetall. The draft will outline the commitment to main

UBS Cons.

conventional items such as ammunition, armoured vehicles (including Boxer) and Navy 12/26E 39.67 37.06

vessels but also to digital spending. The market has yet to respond to the NATO summit, 12/27E 54.73 54.55

but supportive rhetoric and greater pressure on Europe to increase investment are likely. 12/28E 71.58 75.87

We expect Q2 to be in line with guidance, which could calm some execution fears.

Sven Weier

Confidence needs more than just a conservative guidance approach Analyst

sven.weier@ubs.com

While the catalysts mentioned above are all important, there may be more fundamental +49-69-1369 8278

issues to solve. We think a conservative approach to FY and project guidance approach

Andre Kukhninwould be prudent. 1-year forward guidance should better reflect client delay risk, and

Analyst

we think a wider upside/downside range in medium-term guidance would make sense, andre.kukhnin@ubs.com

vs the current fixed value. We would expect the F-126 setback to lead to a +44-20-7567 2162

reconsideration of conventional M&A, and less long-term 155mm visibility should lead

Ed Hussey

to a re-evaluation of capex. Based on past company commentary, the market might be

concerned about the company's level of new tech alertness (link). We think it has a lot to edward.hussey@ubs.com

offer, not just in drones (link) but doubling down on capital allocation into such a unit +44-20-7568 3946

could address a perceived open flank.

Valuation: Rating and PT unchanged until there is more evidence on change

We cut our PT to €1,600 in May (link). We believe it would be premature to change our

stance and prefer to wait for greater clarity on the company's response to these