German defense contractor Rheinmetall announced on July 2, 2026, that it expects a revenue reduction of up to 300 million euros this year after the German Federal Ministry of Defense canceled the F126 frigate program.
The ministry opted for a smaller vessel design from competitor TKMS, ending the long-delayed and over-budget naval project.
Rheinmetall noted that second-quarter revenue growth accelerated past 60 percent, but overall order targets will fall short of the previously projected 20 billion euros, settling at a lower double-digit billion-euro level.
Analyst Reactions
Barclays analyst Afonso Osorio rated the stock "overweight," predicting 59 percent growth to nearly 3.1 billion euros in Q2.
He expects Rheinmetall to maintain baseline annual targets, though Barclays lowered its price target from 2,035 to 2,000 euros.
JPMorgan analyst David H Perry gave a "neutral" rating, lowering earnings-per-share estimates through 2030.
He cited rapid technological shifts and slower German procurement timelines, though Q2 orders outperformed his initial estimate.
Deutsche Bank Research analyst Christoph Laskawi maintained a "buy" rating but cut his price target from 2,100 to 1,800 euros.
He said upcoming Q2 figures on August 6 should confirm growth acceleration and called recent stock weakness an exaggerated reaction.
On July 3, Rheinmetall shares dropped 1.52 percent to 1,085.80 euros in early trading, compounding a year-to-date decline of nearly 30 percent.
Rheinmetall is reviewing whether the cancellation requires broader adjustments to its full-year outlook, with detailed disclosures scheduled for August 6, 2026.
