Rheinmetall: continued rise despite mixed results

(CercleFinance.com) - On Wednesday, Rheinmetall reported lacklustre annual results for 2024 and an outlook for 2025, but the important thing was elsewhere for the German defense and security group, whose share price has more than doubled since the start of the year.


This morning, the Düsseldorf-based group reported a 36% increase in sales to 9.75 billion euros for last year, with record operating income of 1.48 billion euros, up 61% on 2023, giving an operating margin of 15.2%.

For the current financial year, the manufacturer of, among other things, air defense and soldier weapon systems, is forecasting sales growth of between 25% and 30%, with an operating margin of 15.5%.

While these annual results and forecasts fall a little short of market expectations, analysts preferred to focus on other more encouraging elements, such as the company's longer-term prospects.

The group indicated that its targets for 2025, unveiled this morning, would soon be revised upwards as a result of greater visibility regarding the future trajectory of the German defense budget", Berenberg's teams pointed out.

"Even more important in our view, the reference made during the presentation to the Vision 2030 strategic plan, which aims to boost defense revenues to over €26 billion by 2030, compared with €8 billion in 2024, should be welcomed", the research firm judged.

Under normal conditions, we would have expected the stock to show weakness after Q4 2024 results and lower-than-expected 2025 forecasts", add Stifel analysts.

But in view of the large contracts potentially linked to the European rearmament project and the possibility of a forthcoming increase in targets, all this should play a secondary role", Stifel acknowledges.

Shortly before 4:00 pm, Rheinmetall shares were up by almost 7%, one of the best performers in the STOXX Europe 600 index.

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