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Defense giant Rheinmetall plunges 16% after cutting outlook on stalled military contracts

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In short

The revision scales back projected 2026 revenue to roughly 13.2 billion euros and trims expected operating margins to about 18.5%. Despite the lowered medium-term targets, the company posted strong third-quarter figures, with operating profit leaping 62% to 553 million euros. Business inflow also remained robust, as 2.89 billion euros in quarterly orders expanded the overall order backlog to 78 billion euros.

Key points

  • Repeated guidance reductions highlight delivery bottlenecks despite surging European defe…: Repeated guidance reductions highlight delivery bottlenecks despite surging European defense budgets following Russia's invasion of Ukraine.
  • Cancellations and testing delays are actively stalling financial momentum for Europe's ma…: Cancellations and testing delays are actively stalling financial momentum for Europe's major defense contractors.
  • Strong quarterly profits and a massive order backlog suggest underlying demand persists d…: Strong quarterly profits and a massive order backlog suggest underlying demand persists despite short-term operational hurdles.

Sources checked by our analysis pipeline: 1

German defense giant Rheinmetall cut its full-year guidance late Wednesday, citing delays to military contracts and ammunition deliveries.

It marks the company's second outlook cut since August, when Germany scrapped plans to build warships in what would have been Rheinmetall's biggest order since World War II.

The defense company now expects sales to rise to around 13.2 billion euros ($14.9 billion) in 2026, down from a prior outlook range of between 13.7 billion and 14.2 billion euros. It is expected to have an operating margin of around 18.5%, down from the previously expected 19%.

Rheinmetall said it's revising its 2026 guidance due to delays in the German military's Arminius Boxer project, now expected to be commissioned next year, and setbacks in artillery ammunition acceptance testing.

Shares fell as much as 15% in early trading.

Coming into Thursday trading, shares were re down roughly 35% year-to-date, following an average annual return of 114% over the prior four years as it became one of the main beneficiaries of ramped-up military spending by European governments amid Russia's full-scale invasion of Ukraine in 2022.

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