Rheinmetall shares rise as defense giant sees sales surging fivefold by 2030

Shares of Germany’s Rheinmetall rose on Tuesday after the defense giant told investors to expect sales to quintuple over the next five years, boosted by robust demand for its weapons systems amid geopolitical tensions and the war in Ukraine.

The company forecast sales of about 50 billion euros ($58 billion) by 2030, up from about 10 billion euros in 2024. The bulk of 2030 sales will come from its vehicle systems and weapons and ammunitions businesses, Rheinmetall said. It sees operating margin expanding to about 20%, up from 15.2% in 2024.

Shares rose 3% to 1,775 euros by midday Tuesday, topping the German blue-chip DAX index which was almost entirely in the red.

Rheinmetall, like many other defense contractors, has benefitted from Europe’s increased defense spending against the backdrop of Russia’s full-scale invasion of Ukraine.

Earlier this year NATO allies agreed to increase defense spending to 5% of gross domestic product by 2035, up from a previous target of 2%, citing “profound security threats and challenges,” including the long-term threat posed by Russia to Euro-Atlantic security.

Rheinmetall’s revenue has already nearly doubled over the past three years and shares have risen about 190% so far this year, and about 900% over the last three years.

“Despite the stock’s meteoric rise, forward multiples suggest that the market does not fully appreciate Rheinmetall’s growth,” Rothschild & Co Redburn analysts said earlier this month.

Early Tuesday, Rheinmetall also announced a reorganization of its units, including creating new naval and air defense units, expected to bring in a combined 8-9 billion euros in sales by 2030. CEO Armin Papperger said he hoped the new naval unit would be ready in January.

M&A could be another growth driver for the German “wunderstock,” however, it will depend on the availability of suitable targets, the Rothschild analysts said.

In September, the company announced a deal to acquire Lürssen Group for an undisclosed purchase price, with the transaction expected to close early 2026.