Shares of leading German defense manufacturer Rheinmetall (RHM.DE) — a producer of 155mm artillery shells and military vehicles — are down nearly 4% today, extending a short-term downtrend and pulling back roughly 20% from record highs of €1,850 per share.
- The defense company recently reported earnings that fell short of the market’s lofty expectations, while its valuation — by conventional industrial sector metrics — remains extremely stretched, reflecting investor optimism over future contracts and a robust order backlog.
- The prospect of peace in Ukraine and a ceasefire is draining momentum from defense stocks and shifting capital to other market sectors, even if the chances of a truce remain uncertain. Russia is likely to continue negotiating from a position of strength, demanding significant portions of eastern Ukraine. Europe, meanwhile, plans to support Ukraine’s independence and is expected to be “more difficult” for Russia to deal with in negotiations.
Rheinmetall shares (D1 interval)
Rheinmetall remains a key player in Europe’s defense industry, but given its very high valuation, any news related to peace in Europe could weigh heavily on sentiment. Likewise, it is unclear whether heavy industry and defense spending will remain at elevated levels if, following a potential “peace” in Ukraine, Russia abandons an “escalatory” stance for an indefinite period.
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Create account Try a demo Download mobile app Download mobile appThe share price has dropped below the 50-day and 100-day exponential moving averages, while the EMA200 at €1,300 suggests the possibility of a further ~15% pullback in an extreme trend-strength test scenario — a trend in place since the winter of 2022.
Source: xStation5
