Rheinmetall (RHM) AI Stock Analysis

• Market Cap: €83.17B
• Dividend Yield: 0.45%
• Average Volume (3M): 312.66K
• Price to Earnings (P/E): 106.3
• Beta (1Y): 0.72
• Revenue Growth: 41.65%
• EPS Growth: 42.12%
• Country: DE
• Employees: 29,515
• Sector: Industrials
• Sector Strength: 90
• Industry: Aerospace & Defense
• EPS (TTM): 1.91
• Shares Outstanding: 45,894,802
• 10 Day Avg. Volume: 241,891
• 30 Day Avg. Volume: 312,659
• PEG Ratio: 1.79
• Price to Book (P/B): 2.87
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -46.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €2,054.75
• Price Target Upside: 11.61% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

• Rating: 69 Neutral
• Price Target: €1,962.00 ▲(6.57%Upside)

Rheinmetall's strong financial performance is the primary driver of its stock score, supported by solid revenue growth, profitability, and cash flow. The technical indicators are positive but suggest caution due to neutral momentum signals. The high P/E ratio indicates potential overvaluation, which tempers the overall score.

Positive Factors

Defense Business Growth

Strong growth across all defense businesses with sales up 49-93%.

Defense Spending

Raising defense spending in Europe could lead to incremental orders for Rheinmetall's core business land systems.

Financial Performance

Free cash flow at €266 million, 26% ahead of expectations.

Negative Factors

Order Intake

Limited order intake due to the government transition in Germany.

Quarterly Performance

A €140m pull-forward into the previous quarter has impacted this quarter's performance.

Revenue Outlook

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% on higher ramp-up costs for the new ammunition production in Unterluess and the F35 fuselage production in Weeze.

Rheinmetall Business Overview & Revenue Model

Company Description

Rheinmetall AG is a leading German defense and automotive company, known for its innovative solutions in the areas of security and mobility. The company operates through two main sectors: the Defence sector, which focuses on military technology and equipment, and the Automotive sector, which develops and produces components and systems for the automotive industry. Rheinmetall's core products include military vehicles, weapons, and ammunition in the defense sector, and engine components, air management systems, and emission control technologies in the automotive sector.

How the Company Makes Money

Rheinmetall generates revenue primarily through the sale of defense products and automotive components. In the Defense sector, the company earns money by supplying military equipment, such as armored vehicles, weapon systems, and ammunition, to governments and defense organizations worldwide. This sector benefits from long-term contracts with national governments and international defense alliances. In the Automotive sector, Rheinmetall makes money by manufacturing and selling components to major automotive manufacturers. This includes products related to engine efficiency, emission reduction, and fuel consumption optimization. Strategic partnerships and joint ventures in both sectors also contribute to the company's earnings by enhancing its technological capabilities and market reach.

Rheinmetall Financial Statement Overview

Summary

Rheinmetall demonstrates strong revenue growth and profitability with solid margins and robust cash generation. The company maintains a balanced leverage approach, supported by a strong equity base. Monitoring debt levels is advisable but overall financial health is strong.

Income Statement

Rheinmetall demonstrates strong revenue growth with an increase from €9.75 billion to €10.47 billion in TTM, indicating a positive growth trend. The Gross Profit Margin is solid at approximately 50.8% for TTM, reflecting efficient production. The Net Profit Margin is robust at about 7.2%, showcasing profitability. EBIT and EBITDA margins are healthy at 14% and 17.7% respectively, indicating operational efficiency.

Balance Sheet

The company's Debt-to-Equity ratio stands at 0.38, indicating a conservative approach to leverage. Return on Equity (ROE) is a strong 16.8%, reflecting effective use of equity. The Equity Ratio is solid at 30.5%, suggesting a stable financial structure with sufficient equity backing.

Cash Flow

Rheinmetall shows a significant increase in Free Cash Flow from €988 million to €1.47 billion, highlighting robust cash generation capabilities. The Operating Cash Flow to Net Income Ratio is 2.98, indicating strong cash flow relative to profits. The Free Cash Flow to Net Income Ratio is 1.95, showcasing efficient cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.47B	9.75B	7.18B	6.41B	5.66B	5.88B
Gross Profit	5.32B	5.06B	3.94B	3.38B	3.03B	2.94B
EBITDA	1.85B	1.77B	1.23B	960.00M	867.00M	644.00M
Net Income	753.00M	717.00M	535.00M	474.00M	291.00M	1.00M
Balance Sheet
Total Assets	14.66B	14.34B	11.94B	8.09B	7.73B	7.27B
Cash, Cash Equivalents and Short-Term Investments	1.08B	1.25B	915.00M	696.00M	1.22B	1.04B
Total Debt	1.70B	2.42B	1.91B	972.00M	921.00M	1.02B
Total Liabilities	9.73B	9.88B	8.30B	5.01B	5.11B	5.21B
Stockholders Equity	4.47B	4.05B	3.32B	2.81B	2.42B	1.89B
Cash Flow
Free Cash Flow	1.47B	988.00M	345.00M	-175.00M	419.00M	216.00M
Operating Cash Flow	2.25B	1.72B	743.00M	174.00M	690.00M	453.00M
Investing Cash Flow	-1.22B	-1.17B	-1.18B	-534.00M	-462.00M	-188.00M
Financing Cash Flow	-472.00M	-234.00M	746.00M	-131.00M	-202.00M	-148.00M

Rheinmetall Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1841.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 1841 is above the 20-day moving average (MA) of 1788.23, above the 50-day MA of 1774.48, and above the 200-day MA of 1086.84, indicating a bullish trend. The MACD of 27.64 indicates Negative momentum. The RSI at 55.22 is Neutral, neither overbought nor oversold. The STOCH value of 66.55 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HAG	79 Outperform	€11.67B	127.92	10.95%	0.49%	25.46%	41.26%
ENR	75 Outperform	$73.66B	336.01	1.79%	―	17.17%	―
8TRA	74 Outperform	€14.79B	5.86	14.10%	5.75%	-2.53%	-4.91%
Sector *	71 Outperform	¥254.15B	13.65	8.48%	3.02%	6.34%	13.16%
MTX	70 Outperform	€20.33B	32.11	20.33%	0.58%	38.19%	―
RHM	69 Neutral	€83.17B	106.30	21.45%	0.45%	41.65%	42.12%
OHB	62 Neutral	€1.39B	364,000.00	<0.01%	0.85%	-2.53%	-99.99%