The Russian attack on Ukraine in 2022 marked a turning point. Europe must modernize its military in order to prepare itself adequately for the new threat situation. This has led to a significant increase in defense spending – and with it the order books of listed defense companies such as Rheinmetall, Hensoldt and Co. filled. Their shares took off afterwards, with Rheinmetall as a clear outperformer since the start of the war with a total price increase of around 1,400 percent. But Hensoldt also performed strongly, and the price has still increased more than sixfold during this time.
Consolidation in the sector
However, if you look at the latest developments over the last six months, the picture looks completely different. Rheinmetall and Hensoldt suffered a share price decline of around 20 percent during this period. For other armor values such as Renk or Steyr Motors, the discounts are also double-digit. The consolidation in the sector is a reaction to the previously high price gains – and to the valuation. Because even after the correction, Rheinmetall’s analyst consensus P/E for 2026 is still 36 (as of April 24th, price 1,353.40 euros), Hensoldt is around 44 (price 73.70 euros), Renk is just under 33 (price 55.58 euros) and Steyr is around 18 (price 37.06 euros). The big titles in particular are by no means a bargain.
The hour of the latecomers
Deutz stands out from this – with a P/E ratio for 2026 of just 11.6 (price 10.30 euros). It is therefore not surprising that the share is clearly ahead in the performance comparison with an increase of more than 10 percent in the last six months. Of course, the company is not a pure defense stock either, as the business focus is on combustion engines for various industries. But the company is expanding intelligently in the defense sector, increasing its growth and margin potential.
An attractive mix
Another candidate that combines an established core business in various industrial sectors with an expansion of the defense business is currently in the IPO process. It is electrovac AG, which specializes in hermetic glass-metal housings. […]
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