Rheinmetall Shares Start 2026 Strong as Defense Sector Regains Favour

Rheinmetall AG shares (ETR:RHM) have begun 2026 with renewed bullish momentum, reflecting a growing interest in the defense sector. The RHM share price has gained 2.36% in today’s early trading, reaching €1,868, an impressive 19.63% increase since the beginning of the year.

Rheinmetall’s share price has experienced remarkable growth over the past year, climbing 187% and solidifying its position as a leading performer in European markets. This surge is underpinned by strategic initiatives and robust financial results, positioning the company favourably in the evolving defense landscape.

A key driver of this positive market sentiment is the strategic partnership with Lockheed Martin, announced in December. The memorandum of understanding aims to establish a European missile joint venture, focusing on integrated air and missile defense systems, long-range strike capabilities, and precision-guided munitions. Following this announcement, BofA Securities raised Rheinmetall’s price target to €1,900, reiterating a ‘Buy’ rating, signalling confidence in the company’s strategic direction.

Further bolstering its market position, Rheinmetall expanded into naval defense through the acquisition of the military division of Lürssen shipyards in September 2025. This move diversifies Rheinmetall’s portfolio, transforming it into a comprehensive defense solutions provider capable of addressing multiple domains.

Rheinmetall has been actively pursuing international collaborations. In October 2024, a joint venture with Leonardo was formed to develop main battle tanks and infantry fighting vehicles, targeting the Italian Army’s modernization programs. Additionally, a partnership with Finnish satellite manufacturer ICEYE in May 2025 facilitated a €1.7 billion order from the German Army, enhancing space-based reconnaissance capabilities.

Sharpened Focus and Strong Financials

In December 2025, Rheinmetall strategically divested its civil business activities, classifying them as discontinued operations, to sharpen its focus on defense. This realignment underscores the company’s commitment to its core competencies and its intent to capitalize on growth opportunities within the defense sector.

Rheinmetall’s financial performance has been robust, as evidenced by its Q3 2025 results. The company reported a 20% increase in consolidated sales, reaching €7.5 billion, and an 18% rise in operating results to €835 million. The defense segment experienced a 28% sales growth, with an operating result margin of 13.6%, demonstrating strong profitability and operational efficiency.

The combination of strategic initiatives, strong financial performance, and bullish analyst sentiment has driven the Rheinmetall share price higher in early 2026. The 1,900 level has previously offered up some resistance in earlier attempts higher, with markets no doubt keeping an eye on how the shares respond if they continue to move upwards.