Dusseldorf-based German defense company Rheinmetall (RHM.DE) is up 6% today, with its shares hitting their highest level in a month. This year, Rheinmetall is the second best performer on the DAX (after Siemens Energy), with an increase of 80% since the start of the year.
- The company said it was experiencing growth “like never before in the group” amid the war in Ukraine; the company raised its profitability target for fiscal 2024. Rheinmetall does not expect Trump’s victory to impact its defense programs for the United States of America, with the company’s takeover American Loc Performance. CEO Armin Papperger said the United States will be a very strong core market for the group, which is building an industrial base in the country, and “It doesn’t matter who is president in the United States. »
- Incoming orders increased 48% year-on-year to 21 billion euros ($22.61 billion) from January to September due to Bundeswehr contracts and related to military aid to Ukraine. The order book reached a new record at 52 billion euros and is expected to reach 60 billion euros by the end of the year. The company expects to hit the €10 billion annual sales threshold for the first time this year, after sales rose 36% from January to September to €6.3 billion (the German customers representing almost a third of sales).
- The group is now preparing to double its annual sales to reach 20 billion euros in a few years. German contract manufacturers have lowered their operating margin forecasts for the full year, currently targeting the high end of the range of 14-15% for this year (11.3% for the first nine months) . According to analysts at JP Morgan, Rheinmetall will likely be a long-term winner, but it currently faces short-term uncertainties amid the Russia-Ukraine ceasefire and the political storm in Germany.
Rheinmetall (intervalle D1)
On the chart we can see the formation of a potentially bullish flag pattern, with technical aspects pushing to test the price channel’s resistance zone near 530 EUR. The major resistance area lies at EUR 570, with two previous local highs. The stock defended the decline, respecting the EMA200 support (the red line).
Source: xStation5
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