Rheinmetall reaches an 80.5 billion euro order book and still cuts revenue guidance

Rheinmetall generated revenue of 5,227 million euros in the first half of 2026, up 39 percent on the year before. Operating profit rose 74 percent to 786 million euros, and the operating margin to 15 percent.

In the second quarter alone operating profit gained 115 percent to 562 million euros. Earnings per share almost doubled, from 4.69 to 8.43 euros.

The order book reached a record 80.5 billion euros. Against the year before that corresponds to a rise of around 44 percent.

The group nevertheless cut its revenue guidance for 2026 on 6 August. It now expects 13.7 to 14.2 billion euros, after 14.0 to 14.5 billion previously.

The short version

• Revenue rose 39 percent in the first half of 2026 to 5,227 million euros, and operating profit 74 percent to 786 million euros.
• The order book reached a record 80.5 billion euros, around 44 percent above the previous year.
• Revenue guidance for 2026 was cut on 6 August to 13.7 to 14.2 billion euros.

A halted frigate programme costs 300 million euros

The reason for the cut is a single project. The defence ministry halted the F126 frigate programme in June.

For Rheinmetall that means lost revenue of around 300 million euros and therefore exactly the difference to the previous guidance.

The episode shows a risk that exists structurally at defence companies. Orders hang on political decisions that can change at short notice. Neither demand nor manufacturing capability plays a part in that.

Measured against the order book of 80.5 billion euros the cut is nevertheless small. The book corresponds to about six times an annual revenue.

The group pushes back into naval business

The reaction is notable. After the halt Rheinmetall appeared to be squeezed out of the naval business.

The group is now bidding with a frigate design of its own for a programme of the American navy. In addition it is moving back into that area through a possible supplier role on a further ship programme.

In parallel the German armed forces have ordered a further tranche of heavy transport vehicles.

Negative cash flow from inventory build up

One item in the half year report dampens the mood. Operating free cash flow was clearly negative, caused by the build up of inventories.

That is to be expected at a company in this phase. Anyone who wants to ramp up production has to buy material and intermediate goods first, before the finished goods are paid for. The same constellation shows at Airbus, which reported negative cash flow of 1.17 billion euros in the first half for the same reason.

What matters is whether those inventories convert into deliveries. That is exactly the core question for the coming quarters.

The share sits 40 percent below its high

The share price development stands in sharp contrast to the figures. In October 2025 the share had cost 2,007 euros. On 8 August 2026 it traded at 1,146 euros and therefore more than 40 percent below its peak.

During that week the price had run up to 1,238 euros and therefore into the region above 1,200 euros for the first time, but bounced off there. On 13 August it stood at around 1,174.80 euros.

That gap between operating performance and share price is the real finding. A group that nearly doubles its earnings per share and reports a record order book trades far below its high.

One observer offers a possible explanation. The market punished a hope, not an order. A considerable part of the earlier price targets is likely to have rested on expectations about the naval business, which have now fallen away.

Analysts stay largely positive

The views of the houses diverge widely. In a survey of 20 analysts, 17 advise buying, two holding and one selling. The average price target is 1,680.85 euros.

The range runs from 2,380 euros among the optimists to 1,050 euros among the cautious. Goldman Sachs confirmed a price target of 2,300 euros on 6 August. RBC started coverage in mid August at 1,600 euros and pointed to expected earnings growth to 2030.

For financial year 2025 the board proposes a dividend of 11.50 euros per share, up 42 percent from 8.10 euros for 2024.

As the critical point observers name the ability to serve the high demand through the timely expansion of production capacity. The order book alone produces no revenue as long as it cannot be worked off.

Frequently asked questions

Why was guidance cut

The defence ministry halted the F126 frigate programme in June. For Rheinmetall that means lost revenue of around 300 million euros and therefore exactly the difference to the previous guidance.

Why is cash flow negative

Operating free cash flow was clearly negative, caused by the build up of inventories. Anyone who wants to ramp up production has to buy material and intermediate goods first, before the finished goods are paid for. The same constellation shows at Airbus.

Why does the share sit 40 percent below its high

In October 2025 the share had cost 2,007 euros, and on 8 August 2026 it traded at 1,146 euros. One observer explains that by saying the market punished a hope and not an order. A considerable part of the earlier price targets is likely to have rested on expectations about the naval business.

This analysis is for information only and is not investment advice.