Rheinmetall rebounds 3% trying to stop the sell-off 📈

Shares of German defense giant Rheinmetall (RHM.DE) are up nearly 3% today, rebounding almost 7% from the recent local low, when the stock briefly dipped below €1,500.

• Demand in Europe for defense systems such as 155 mm ammunition and transport vehicles appears set to remain strong—particularly if Europe commits to acting as the main guarantor of Ukraine’s security. According to Politico, the US role in the new security architecture is expected to be marginal.
• The recent sell-off in Rheinmetall shares may have been driven more by “sentiment” factors tied to growing hopes for a peaceful resolution to the war in Ukraine. However, long-term demand for Rheinmetall’s products and services could remain elevated as NATO countries are increasingly compelled to boost defense spending.

The key condition will be whether current commitments translate into actual, rising expenditures on armaments among alliance members. JP Morgan continues to rate the stock “Overweight,” with a price target of €2,250 per share.

Source: xStation5