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Rheinmetall AG (DE:RHM)
XETRA:RHM

Rheinmetall (RHM) AI Stock Analysis

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DE

Rheinmetall

(XETRA:RHM)

Rating:72Outperform
Price Target:
€2,035.00
▲(8.13%Upside)
Rheinmetall's strong financial performance and positive technical indicators are driving the stock's positive outlook. However, the high P/E ratio raises concerns about overvaluation, and the low dividend yield offers limited appeal for income investors. The absence of specific earnings call insights or notable corporate events means the score is primarily influenced by existing financial and technical data.
Positive Factors
Defense Spending
Proposed changes could pave the way for sustainably higher defense spending in Germany.
Earnings
Strong growth across all defense businesses with sales up 49-93%.
Financial Performance
Free cash flow at €266 million, 26% ahead of expectations.
Negative Factors
Costs
Higher ramp-up costs for the new ammunition production in Unterluess and the F35 fuselage production in Weeze impact margin expectations.
Guidance
FY25 revenue outlook is slightly below consensus despite the revenue slippage from 4Q24 into FY25 while guided margin of approximately 15.5% falls short of consensus of 16.3%.
Revenue
RHM reported FY24 results with 4Q24 group revenue approximately 6% below VisibleAlpha consensus as deliveries worth around €200m have slipped from 4Q24 into FY25.

Rheinmetall (RHM) vs. iShares MSCI Germany ETF (EWG)

Rheinmetall Business Overview & Revenue Model

Company DescriptionRheinmetall AG provides technologies to the mobility and security sectors worldwide. The company operates in five segments: Vehicle Systems, Weapon and Ammunition, Electronic Solutions, Sensors and Actuators, and Materials and Trade. The Vehicle Systems segment offers combat, support, logistics, and special vehicles, including armored tracked vehicles, CBRN protection systems, turret systems, and wheeled logistics and tactical vehicles. The Weapon and Ammunition segment provides threat-appropriate, effective and accurate firepower, and protection solutions, such as large and medium-caliber weapons and ammunition, weapon stations, protection systems, and propellants and powders. The Electronic Solutions segment offers a chain of systems network, such as sensors, networking platforms, automated connected effectors for soldiers, and cyberspace protection solutions, and training and simulation solutions. Its products include air defense systems; soldier systems; command, control, and reconnaissance systems; fire control systems; sensors; and simulations for the army, air force, navy, and civil applications. The Sensors and Actuators segment provides a portfolio of products comprising exhaust gas recirculation systems; throttle valves, control dampers, and exhaust flaps for electromotors; solenoid valves; actuators and valve train systems; oil, water, and vacuum pumps for passenger cars, commercial vehicles, and light and heavy-duty off-road applications; and industrial solutions. The Materials and Trade segment focuses on the development of system components for the basic motors, such as engine blocks, structural components, and cylinder heads; plain bearings, and bushes; and replacement parts. It also engages in the aftermarket activities. The company was formerly known as Rheinmetall Berlin AG and changed its name to Rheinmetall AG in 1996. Rheinmetall AG was founded in 1889 and is headquartered in Düsseldorf, Germany.
How the Company Makes MoneyRheinmetall AG generates revenue through its two primary divisions. The Automotive division earns money by supplying automotive parts and systems to major car manufacturers and suppliers worldwide. Key revenue streams include sales of engine components, mechatronic systems, and aftermarket products. Furthermore, the company invests in research and development to innovate in areas like electric mobility and emission reduction, which attract more business from environmentally-conscious automotive clients. The Defence division is a significant revenue driver, with earnings coming from the sale of military hardware, such as armored vehicles, ammunition, and advanced electronic systems to governments and defense contractors globally. Rheinmetall's defense business benefits from long-term contracts and partnerships with national defense agencies, ensuring steady income. Additionally, the company engages in joint ventures and strategic alliances to expand its technological capabilities and market reach in both the automotive and defense sectors.

Rheinmetall Financial Statement Overview

Summary
Rheinmetall demonstrates remarkable financial performance with strong growth in revenue and profitability, supported by a solid balance sheet and excellent cash flow generation. The company maintains a stable financial structure with moderate leverage and efficient cash management, positioning it well for future growth. However, the increase in debt should be monitored.
Income Statement
90
Very Positive
Rheinmetall showcases strong revenue growth with a notable increase from €7.18 billion in 2023 to €9.75 billion in 2024, indicating a growth rate of 35.9%. The gross profit margin is robust at 51.9%, while the net profit margin has improved to 7.4% in 2024, reflecting improved operational efficiency. EBIT and EBITDA margins are also strong at 24.1% and 18.0% respectively, indicating solid profitability.
Balance Sheet
75
Positive
The balance sheet reflects a healthy equity position with stockholder's equity rising to €4.05 billion in 2024. The debt-to-equity ratio is manageable at 0.60, suggesting moderate leverage. The equity ratio is strong at 28.2%, providing a stable financial foundation. However, the increase in total debt to €2.42 billion warrants monitoring.
Cash Flow
85
Very Positive
The cash flow statement indicates substantial growth in free cash flow, rising from €345 million in 2023 to €988 million in 2024, a growth rate of 186.4%. The operating cash flow to net income ratio is robust at 2.40, indicating strong cash generation relative to net income. Free cash flow to net income ratio is 1.38, reflecting efficient cash management.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
10.47B9.75B7.18B6.41B5.66B5.88B
Gross Profit
5.32B5.06B3.94B3.38B3.03B2.94B
EBIT
1.47B1.41B854.00M754.00M624.00M293.00M
EBITDA
1.85B1.77B1.23B960.00M838.00M644.00M
Net Income Common Stockholders
753.00M717.00M535.00M474.00M432.00M1.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.08B1.25B915.00M696.00M1.22B1.04B
Total Assets
14.66B14.34B11.94B8.09B7.73B7.27B
Total Debt
0.002.42B1.91B972.00M921.00M1.02B
Net Debt
-1.08B1.24B1.06B427.00M-118.00M-4.00M
Total Liabilities
9.73B9.88B8.30B5.01B5.11B5.21B
Stockholders Equity
4.47B4.05B3.32B2.81B2.42B1.89B
Cash FlowFree Cash Flow
1.47B988.00M345.00M-175.00M419.00M216.00M
Operating Cash Flow
2.25B1.72B743.00M174.00M690.00M453.00M
Investing Cash Flow
-1.22B-1.17B-1.18B-534.00M-462.00M-188.00M
Financing Cash Flow
-472.00M-234.00M746.00M-131.00M-202.00M-148.00M

Rheinmetall Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1882.00
Price Trends
50DMA
1555.42
Positive
100DMA
1245.63
Positive
200DMA
897.08
Positive
Market Momentum
MACD
94.01
Positive
RSI
68.41
Neutral
STOCH
57.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:RHM, the sentiment is Positive. The current price of 1882 is above the 20-day moving average (MA) of 1775.57, above the 50-day MA of 1555.42, and above the 200-day MA of 897.08, indicating a bullish trend. The MACD of 94.01 indicates Positive momentum. The RSI at 68.41 is Neutral, neither overbought nor oversold. The STOCH value of 57.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:RHM.

Rheinmetall Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
DERHM
72
Outperform
€83.12B105.9521.45%0.44%41.65%42.12%
66
Neutral
$4.49B12.285.32%248.53%4.08%-12.00%
€19.18B30.0720.33%0.62%
€1.46B381,000.00<0.01%0.79%
74
Outperform
€15.11B6.0014.10%5.66%-2.53%-4.91%
$80.03B374.771.79%
DEHAG
70
Outperform
€11.71B125.9310.95%0.49%25.46%41.26%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DE:RHM
Rheinmetall
1,882.00
1,360.84
261.12%
GB:0FC9
MTU Aero Engines
354.00
126.62
55.69%
GB:0FH7
OHB SE
76.00
33.09
77.11%
DE:8TRA
TRATON SE
29.38
-0.49
-1.64%
SMEGF
Siemens Energy
101.00
75.75
300.00%
DE:HAG
HENSOLDT AG
105.90
69.05
187.38%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.