Rheinmetall expects a 40-45% increase in sales this year, but performance in 2025 falls short of expectations

Investing.com - Rheinmetall states that sales are expected to grow by 40% to 45% by 2026, in line with the company’s survey expectations.

The company forecasts revenue between €14 billion and €14.5 billion in 2026, compared to €9.9 billion reported in 2025. This guidance roughly aligns with the midpoint estimate of €14.1 billion in the Vara consensus survey.

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The company’s guidance for operating profit margin is about 19%, up from the previous range of 18-20%. According to Jefferies, this implies an EBIT of approximately €2.66 billion to €2.76 billion. Jefferies analyst Chloe Lemarie stated that, at the midpoint, this is about 2% below market consensus expectations.

“The group has slightly adjusted its 2026 guidance, with sales slightly above the upper end of its preliminary pre-close guidance, and EBIT margin at a mid-level. However, since market consensus is already at the upper end, the new guidance is 1% higher in sales but 2% lower in EBIT,” Lemarie wrote.

Rheinmetall also provided a cash conversion rate guidance of over 40%, while reaffirming a target order intake of around €80 billion in 2026. “The free cash flow guidance is set at >40%, which may be viewed negatively by the market, as the market consensus is €2.5 billion or a 90% conversion rate,” Lemarie noted.

The company announced plans to propose a dividend of €11.50 per share for fiscal year 2025 at the annual shareholders’ meeting in May, higher than last year’s €8.10.

In 2025, Rheinmetall reported sales of €9.935 billion, a 29% increase from the previous year. Operating profit, a key profitability indicator, rose from €1.4 billion in 2024 to €1.84 billion, with the operating profit margin increasing to 18.5%.

However, performance fell short of market expectations. The market consensus anticipated sales of about €10.12 billion, operating profit of €1.92 billion, and an operating margin of 19%.

Full-year net profit declined from €717 million in 2024 to €696 million, also below Visible Alpha’s consensus estimate of €1.15 billion.

As of the end of 2025, the company’s order backlog reached a record €63.8 billion, up 36% from the previous year.

Q4 results also missed expectations. According to Jefferies, Rheinmetall generated €2.42 billion in revenue in the last quarter, about 7% below market consensus. Operating profit was also approximately 7% below expectations.

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