Shares of Rheinmetall AG fell after the defense group's pre-close call, despite reiterating its 2025 targets. The company anticipates 30% to 35% sales growth in FY2025, with an operating margin between 18.5% and 19%. This news comes as European defense spending is under scrutiny due to the ongoing war in Ukraine, driving investor interest.

For FY2026, Rheinmetall projects revenues in the EUR15-16 billion range, including contributions from NVL. Management expects an operating margin of 18% to 20%, supported by strong cash generation. Analysts are scrutinizing these figures closely given the current geopolitical climate and the company's role in supplying military equipment to allies.

Kepler Cheuvreux noted that the call provided greater insight into the 2026 financial outlook. Market forecasts for operating margins may be too low, potentially offsetting revenue risks. Rheinmetall is expected to see a build-up in its order book, particularly from German defense orders, leading to structural growth.

Investors are watching defense stocks closely, with many anticipating increased spending in the sector. Any changes to the geopolitical situation have a direct impact on the sector. The company's ability to maintain and expand its order book will be key to its continued growth and profitability. The stock dipped after this update.