Here’s why the Rheinmetall share price is nearing its all-time high

Rheinmetall share price continued rising on Monday, reaching €1,960, its highest point since October, and a few points below the all-time high of €2,010. It has jumped by nearly 40% from its lowest point in December, bringing its market cap to over €90 bilion. 

European defense stocks are soaring

Other European defense stocks also continued rising. BAE Systems’ stock rose to 2,130p, up by 35% from its lowest point in December. Babcock International rose to a record high of 1,500p, while other companies like Safran, Leonardo, and Dassault Aviation have also soared. 

Rheinmetall and other European defense stocks jumped as tensions between the European Union and the United States rose during the weekend.

Donald Trump has insisted that the US will own Greenland and has not ruled out using military force to achieve this goal. He has already warned that he will impose tariffs on some European countries starting from February 1. 

The current events and last year’s trade war has pushed more European countries to start taking their security seriously than they did in the past. European leaders believe that Washington will not be a reliable ally in the future.

Countries have already started boosting their defense spending. Germany boosted the defense budget to €108.2 billion, its biggest spending on recrd. The regulat Bundeswehr budget stands at €82.7 billion, up from €29.4 billion, while the special fund allocated €252.5 billion. 

Germany hopes that it will boost its defense budget to about 3.5% of GDP by 2029. Other countries, including France, Italy, and Spain, are also boosting their defense spending, a move that will benefit top European defense spending, including Rheinmetall. 

At the same time, the company will benefit from Donald Trump’s desire to boost US defense spending to $1.5 trillion. It supplies infantry fighting vehicles, munitions, and autonomous vehicles to the defense department. 

Revenue growth and backlog growing

The most recent financial numbers showed that Rheinmetall’s business continued doing well in the third quarter. Its backlog jumped to €80 billion, up from €54 billion in 2024 and €38 billion in 2023.

The company’s revenue jumped from €7.17 billion in 2023 to €9.7 billion in 2024. Its estimate for 2025 is expected to be between €11.3 billion and €12.2 billion, while its operating margin will get to 15.5%.

Therefore, there are signs that the company’s growth will accelerate in the coming years, with its revenue reaching €20 billion in the coming years. 

However, there is a risk that the company’s valuation has become stretched. Data show that its forward P/E ratio has jumped to over 40, and its PEG ratio has movded to 1.18. These are huge numbers, meaning that the company is priced at perfection.

Rheinmetall share price technical analysis

The daily chart shows that the Rheinmetall stock price has rebounded in the past few months. It has moved from a low of €,411 in December last year to the current €1,958. It is now hovering at the highest point since October 8.

The stock has moved above the 50-day and 100-day Exponential Moving Averages (EMA). It is also nearing the important resistance level at €2,010, its highest point in October.

Therefore, the stock will likely continue rising and possibly retest the all-time high of €2,010. A move above that level will point to more gains, potentially to the key resistance at €2,125, the extreme overshoot of the Murrey Math Lines tool.

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