The significant potential for Rheinmetall's share price to surge on that specific day.
Rheinmetall, the German defence company, recently announced its Q2 2025 results, which showed revenue growth but fell short of analyst expectations. This shortfall, coupled with a negative market reaction, caused the share price to drop by about 5-6%.
The main reason for the revenue miss was a 4.8% shortfall, accompanied by an EPS miss of 21%. Operating margins also slipped slightly. The primary constraint for Rheinmetall's near-term growth is political delays in Germany's defence budget approvals, which have postponed order placements to the second half of 2025.
Despite these setbacks, Rheinmetall maintains a very strong order backlog at €63 billion, over six times annual sales. This robust backlog signals solid medium- to long-term fundamentals, and the company has reaffirmed its 2025 forecast.
The upcoming capital market day could provide more clarity and potentially positive sentiment if management reassures investors about accelerated order flow after Germany’s budget finalization and highlights growth opportunities amid rising European defence spending. However, the near-term momentum is affected by timing and political factors rather than fundamental weakness.
The lower limit of a sideways corridor at around 470 euros has held up against selling pressure. This corridor could now be the starting point for a new rally in Rheinmetall's share price if the selling pressure subsides. If Rheinmetall's share price rallies, it could potentially reach price targets above 500 and 600 euros, according to many analysts.
It's worth noting that the potential for a rally in Rheinmetall's share price could be influenced by positive company news. Analyst Christoph Laskawi expects the targets for 2027 to confirm the desired growth in sales and earnings in all defense areas. The capital market day for Rheinmetall is scheduled for the 18th and 19th of November, where the management is likely to discuss the air defense business and medium-term financial ambitions.
The market expects Rheinmetall's quarterly revenue to be 2.41 billion euros and net profit to be 185 million euros. The quarterly figures are due to be published on the 7th of November.
While the upcoming events could strengthen investor confidence and underpin gradual share price appreciation, expecting them to immediately push Rheinmetall shares beyond €500 would be overly optimistic given the current data and market reaction. The potential for peace negotiations between Ukraine and Russia could also keep the share price below 500 euros.
In conclusion, while Rheinmetall's Q2 results missed market expectations and caused a short-term share price decline, the company's strong order backlog and reaffirmed 2025 forecast signal solid medium- to long-term fundamentals. The upcoming capital market day could provide more clarity and potentially positive sentiment, but a significant near-term price jump above €500 euros would likely require strong positive surprises or broader market conditions favoring defence stocks.
Investors might find an opportunity in the stock-market to purchase Rheinmetall shares, considering the lower share price due to Q2 results and the potential for a rally following the capital market day. The scheduled event could bring positive sentiment and clarity regarding accelerated order flow and growth opportunities, potentially influencing the finance sector's view on investing in Rheinmetall.
If Rheinmetall's share price rallies, as predicted by many analysts, it could reach price targets above 500 and 600 euros, making it an appealing decision for investors looking to invest in the finance sector, specifically in defense stocks.
