Rheinmetall’s group sales increased by 9% to EUR 2.4 billion, largely due to defense, with EBIT growing by 2% to EUR 276 million. Despite delayed prepayments and high capex, free cash flow fell to EUR 911 million. Management is confident in backlog conversion and reaffirmed short-term targets, with potential growth beyond 2030.

With a EUR 63 billion backlog and improving margins, Rheinmetall is undervalued, targeting EUR 40 billion – EUR 50 billion in sales by 2030. Nominations slowed due to political timing, but orders from Berlin are expected to resume post-election. Rheinmetall aims to sell its civilian business by mid-2026 and focus on defense and targeted M&A.

Read more at Morningstar: Muted Growth Due to Timing Masks Backlog Strength