RH RHM.DE Rheinmetall AG Loading... : Bullish and Bearish Analyst Opinions

German lawmakers are expected to approve military procurement deals worth over €12B, including a laser weapon contract with Rheinmetall; news/watch read-through, not an author position.

RHM’s EPS is projected to rise from ~€18.5 (2025) to ~€38.5 (2027), a doubling in two years, yet the PEG ratio sits at 0.5–0.6, far below the typical >1.0 for quality industrials. This PEG discount suggests the market is pricing in temporary growth or a rapid slowdown, but the author argues Europe's underinvestment in defense and multi-year backlog create sustained demand, making the current valuation a buying opportunity. If EPS reaches €38.5 by 2027 and the market re-rates to a still-moderate 25x P/E, the stock would be worth significantly more than today’s €930, offering a compelling risk/reward for long-term investors. Defense spending slowdown, Ukraine de-escalation, government procurement delays, or earnings misses could invalidate the thesis.

The European defense sector, particularly startups, is poised for growth driven by an influx of investment capital from Gulf states.

The company's forward-looking sales guidance for 2026 has missed consensus estimates, creating a catalyst for potential downside.