DE40: DAX gains driven by Siemens and Allianz 📈Rheinmetall loses 3,5% after the earnings report

Positive sentiment in European equities, but FTSE underperforms. Market sentiment on European stock exchanges is positive today, with the Euro Stoxx 50 up over 0.7%. 

• France’s CAC 40 and Germany’s DAX are in line with the European benchmark, while the UK’s FTSE lags behind, falling by more than 0.3%.

• Siemens Energy leads the DAX gains after strong demand and better-than-expected orders. The company reported €2.82 billion in Industrial Business revenue vs. a forecast of €2.78 billion.

• DAX futures (DE40) are rising over 0.6%.

• Recent German data revealed a 0.8% m/m increase in exports and a 4.2% m/m surge in imports, including a remarkable +19.8% jump in imports from the US.

• These figures, coupled with expectations for rate cuts in both the Eurozone and the US, are fueling investor appetite for German equities amid signals of easing trade policy.

Top movers 

• Siemens, Allianz, and Commerzbank are among today’s top performers on the DAX.

• Deutz shares are surging over 11% after posting Q2 EBIT of €26.1 million. Salzgitter and Fraport are also trading higher.

• Rheinmetall is down more than 3.5%, despite strong earnings – the market reacted negatively to disappointing operating margins.

• Deutsche Telekom is seeing a pullback despite solid results and improved sales in both the US and Europe, alongside upgraded 2025 guidance. However, rising domestic competition weighs on sentiment.

• Merck shares are under pressure after the company lowered its 2025 sales forecast, citing currency exchange effects.

• Jefferies analysts have upgraded Evonik to 'Hold' with a €17.5 price target.

DAX (DE40 – H1 Chart)

• After a recent decline, DAX futures have initiated a V-shaped recovery supported by rising bullish volume.

• The price has broken above both the 50-day and 200-day exponential moving averages (EMA50 and EMA200), suggesting bulls may attempt to challenge the key resistance zone around 24,500 points.

• This area has repeatedly triggered reactions in the past and may act as a supply zone once again.

Source: xStation5

Source: Bloomberg Finance L.P.

Rheinmetall financial results 

Germany's defense giant Rheinmetall reported solid but mixed results for the first half of 2025. While the broader picture remains positive for the defense sector, investors reacted to margin concerns and a drop in cash flow.

• Sales: €4.7 billion (+24% YoY) – a record H1 performance.

• Operating profit: €475 million (+18%), margin at 10.0%.

• Confirmed 2025 outlook:

  • Revenue growth of 25–30%

  • Operating margin around 15.5%

• Nominated orders: €14 billion (slight YoY decline due to German budget delays).

• Total backlog: Record €63 billion (+€14 billion YoY).

• Free cash flow: Down to –€644 million, reflecting heavy investment and rising inventories.

Military Vehicles

• Sales: €1.897 billion (+46% YoY)

• Clients: Bundeswehr and international buyers

• Operating profit: €179 million (margin 9.4%)

• Backlog: €20.5 billion (+13%)

• CapEx: €67 million (mainly US and UK expansions)

Ammunition & Weaponry

• Sales: €1.323 billion (+26%)

• Key growth: 155mm artillery ammo deliveries for NATO and Ukraine

• Operating profit: €280 million (+36%), margin up to 21.2%

• Backlog: €21.6 billion (+14%)

• CapEx: €188 million, including a new ammunition plant in Lower Saxony

Electronic Solutions (Digital Defense)

• Sales: €944 million (+46%)

• Major contracts: TaWAN communication systems and IdZ-ES infantry gear

• Nominations: €9.98 billion (+231%)

• Backlog: €16.9 billion (+156%)

• Operating profit: €71 million, margin dropped to 7.6% due to startup costs at the Weeze F-35 fuselage plant

• CapEx: €75 million

Civil Technology Business

• Sales: €987 million (–6.5%)

• Operating profit: €24 million (–58%), margin at 2.4%

• Nominated orders: €7.2 billion (–9%)

• Segment is undergoing transformation toward defense focus

Rheinmetall sees growing demand especially from Central and Eastern Europe and Ukraine. Delays in Germany stem from political reshuffling after elections – contracts expected to pick up in H2. NATO decisions and expanding European defense budgets are expected to fuel sustained demand. CEO Armin Papperger emphasizes growing Rheinmetall’s footprint across Europe and increased cooperation with US defense partners.

Rheinmetall Share Price (D1 Chart)

• The recent rally in Rheinmetall stock appears to be losing steam.

• Should the war in Ukraine slow or pause, a significant correction could occur due to stretched valuations.

• Valuation multiples are elevated, and any shift in perception about Europe’s defense spending could hit the stock hard.

• Technically, the price dropped below the EMA50, while RSI is cooling, forming a bearish divergence.

• A move toward EMA200 could imply a ~30% correction from recent highs.

Source: xStation5