Rheinmetall’s Backlog Leaves No Room for Slippage, Analyst Says

mwb Research reiterated a Sell rating on Rheinmetall (ETR: RHM) with a 1,050 euro price target in a note on Wednesday, arguing that consensus estimates assume the defense group can convert its order book into revenue faster than is realistic.

“Rheinmetall’s (RHM) backlog leaves little doubt that the European defense spending cycle is accelerating and that RHM profits from it,” analyst Jens-Peter Rieck wrote, but added that medium-term consensus implies “an increasingly demanding backlog conversion profile, leaving limited room for execution delays or programme slippage.”

Of the group’s 80.5 billion euro backlog, mwb said 30.2 billion euros of fixed orders are scheduled to convert within 2.5 years.

That fully covers the second half of 2026 and 2027, but Rieck added that it leaves just 2.4 billion euros for 2028 against consensus sales of 25.4 billion euros, which is a coverage rate of only 9.6%. Including frame backlog, up to 77% of 2028 consensus revenue is said to remain uncovered.

The analyst notes that closing that gap would require roughly 65 billion euros of orders converting by the end of 2028 at a constant 30% annual conversion rate, which mwb called ambitious given Rheinmetall has identified a comparable figure of potential vehicle orders across the entire 2025 to 2030 period.

The firm said Germany’s leaked 2027 procurement list points to lower spending on ammunition and combat vehicles, noting only ammunition has short enough production times to help fill the 2028 gap. It models below consensus from 2028 onward.