BofA Cuts Rheinmetall Price Objective, Forecasts Amid Increased Uncertainty on Artillery Demand
BofA Global Research slashed its price objective for Rheinmetall (RHM.F) to 1,300 euros from 1,770 euros, noting increased uncertainty over artillery demand into the 2030s amid shifting trends in demand. "Weapons & Ammunition (W&A) remains the largest division in Rheinmetall's 2030 framework. At the [2025 capital markets day], management outlined a path to EUR14-16bn of revenue & c.30% EBIT margins by 2030, driven by artillery, medium-calibre ammo and missiles. However, the conflicts in Ukraine and the Middle East increasingly demonstrate the importance of drones and precision strike systems, which we believe will divert spending away from traditional artillery," the research firm said Wednesday. "Combined with growing investment in air defence and autonomous systems across NATO, we see rising risk to Rheinmetall's W&A assumptions. We now forecast c.EUR10bn of revenue and c.24% EBIT margins by 2030, reflecting lower artillery revenues, and as a result a less favourable mix." As such, the 2026 EPS estimate for the German arms manufacturer were lowered to 38.76 euros from 39.79 euros. For 2027 and 2028, EPS projections were also reduced to 48.86 euros and 62.77 euros,.
BofA Global Research slashed its price objective for Rheinmetall (RHM.F) to 1,300 euros from 1,770 euros, noting increased uncertainty over artillery demand into the 2030s amid shifting trends in demand. "Weapons & Ammunition (W&A) remains the largest division in Rheinmetall's 2030 framework.
At the [2025 capital markets day], management outlined a path to EUR14-16bn of revenue & c.30% EBIT margins by 2030, driven by artillery, medium-calibre ammo and missiles.
However, the conflicts in Ukraine and the Middle East increasingly demonstrate the importance of drones and precision strike systems, which we believe will divert spending away from traditional artillery," the research firm said Wednesday. "Combined with growing investment in air defence and autonomous systems across NATO, we see rising risk to Rheinmetall's W&A assumptions.
We now forecast c.EUR10bn of revenue and c.24% EBIT margins by 2030, reflecting lower artillery revenues, and as a result a less favourable mix." As such, the 2026 EPS estimate for the German arms manufacturer were lowered to 38.76 euros from 39.79 euros.
For 2027 and 2028, EPS projections were also reduced to 48.86 euros and 62.77 euros,.