German Rheinmetall MAN tactical military transport vehicles parked in the Edvard Peperko military barracks.
Luka Dakskobler | Lightrocket | Getty Images
Shares of Germany’s Rheinmetall rose on Tuesday after the defense giant told investors to expect sales to quintuple over the next five years, boosted by robust demand for its weapons systems amid geopolitical tensions and the war in Ukraine.
The company forecast sales of about 50 billion euros ($58 billion) by 2030, up from about 10 billion euros in 2024. It sees operating margin expanding to about 20%, up from 15.2% in 2024.
Shares rose 3.4% to 1,782 euros Tuesday morning, topping the German blue-chip DAX index which was almost entirely in the red.
Rheinmetall, like many other defense contractors, has benefitted from Europe’s increased defense spending against the backdrop of Russia’s full-scale invasion of Ukraine.
Earlier this year NATO allies agreed to increase defense spending to 5% of gross domestic product by 2035, up from a previous target of 2%.
Rheinmetall’s revenue has already nearly doubled over the past three years, and shares have risen about 190% so far this year.
Early Tuesday, Rheinmetall also announced a reorganization of its units, including creating a new naval unit, expected to bring in 5 billion euros in sales by 2030. CEO Armin Papperger said he hoped the new unit would be ready in January.
