Rheinmetall AG: 1Q26 review: Near-term execution risk, valuation remains attractive

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Rheinmetall AG: 1Q26 review: Near-term execution risk, valuation remains attractive

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Rheinmetall AG

1Q26 review: Near-term execution risk,

valuation remains attractive

Reiterate Rating: BUY | PO: 1,830 EUR | Price: 1,342 EUR

W&A drives the miss on execution delays 08 May 2026 Corrected

RHM pre-released 1Q26 earlier this week, with the revenue shortfall vs consensus Equity

largely due to timing effects. The miss was mainly driven by W&A, where deliveries were

delayed due to phasing, alongside a weaker-than-expected contribution from Naval.

Overall, while there is increasing uncertainty around timing (notably Arminius and missile Key Changes

ventures) and some execution risk tied to capacity expansion, esp in Naval, we believe (EUR) Previous Current

the structural demand story remains intact. Following the recent valuation de-rating, the 2026E Rev (m) 14,241.1 14,237.9

risk/reward appears increasingly attractive, in our view. We adjust our estimates for the 2027E Rev (m) 18,417.9 18,414.2

expected quarterly phasing, but leaving the annual largely unchanged. We reiterate Buy 2028E Rev (m) 24,870.6 24,865.8

rating, PO €1,830. 2026E EPS 39.75 39.74

Focus on capacity constraints, German budget supportive 2027E EPS 56.73 56.72

2028E EPS 79.75 79.73

RHM is focused on addressing capacity constraints, especially in Naval, where the group

2026E DPS 22.50 22.49

currently has only c50% of the production capacity required to meet its pipeline. In this

context, the company has made a non-binding offer for a German naval yard and is in

Benjamin Heelan >>

discussions with an additional shipyard in Romania. While this reflects strong demand Research Analyst

visibility, we view expansion into Naval as adding execution risk, particularly given the Merrill Lynch (DIFC)