German arms stocks recovered from their recent setbacks on Monday: Rheinmetall received an ammunition order from the Bundeswehr, while RENK benefited from a buy recommendation.
Above all RENK after a buy recommendation from Citigroup. The shares of the manufacturer of tank transmissions gained 5.53 percent to 54.57 euros at the end of the XETRA. By December 1st, they had lost almost half of their value from their record of over 90 euros at the beginning of October to just over 47 euros. Recently, the new US initiative to end the war in Ukraine has been particularly damaging.
Military experts and analysts have recently repeatedly emphasized how little the outcome of the Ukraine war would change the threat situation and thus the need for armaments. This is also the case with Charles Armitage from Citigroup. He assumes that arms spending will continue to rise, regardless of the outcome of the war in Ukraine. With an unchanged price target of 65 euros, he advises buying the shares after the recent weak run.
Rheinmetall receives ammunition order from Bundeswehr
Rheinmetall has received an order from the Bundeswehr for tank ammunition worth several hundred million euros. As the DAX group announced, the German armed forces have ordered additional combat and training ammunition of various designs in 120mm x 570 caliber from an existing framework contract from 2023. This contract has a total volume of around 4 billion euros.
Rheinmetall shares also recovered on Monday: They ultimately rose by 3.63 percent to 1,585.00 euros via XETRA, while HENSOLDT shares also gained 2.19 percent to 69.95 euros. Rheinmetall had lost 30 percent since its record of 2,008 euros, HENSOLDT had lost up to 45 percent from its high of almost 118 euros.
Despite the setbacks since their highs, defense stocks have continued to be significantly higher since the end of 2024. Rheinmetall shares have gained 155 percent over the course of the year so far, after the paper had already increased significantly in price from 2022 to 2024.
FRANKFURT (dpa-AFX) / DOW JONES
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