Rheinmetall share price has rebounded this year. It has jumped by 20% in 2026, making it the best-performing company in the DAX Index. It was trading at €1,896, up by nearly 35% from its lowest in December last year.
This article explores why the stock has rebounded and why technicals suggest that a retreat could be coming soon.
Rheinmetall share price jumps as hopes of defense spending rise
The ongoing Rheinmetall stock price has coincided with the rising hopes that defense spending in the United States and Europe will continue rising in the coming months as geopolitical woes rise.
European countries, especially Germany, are working on increasing defense spending this year, with most of these funds going to defense contractors. Germany plans to spend about €108.2 billion, an increase of between €20 billion and €29 billion from what it spent last year.
More European countries are expected to continue boosting defense spending in the coming years. Estimates are that European defense spending will soar to over €426 billion by 2027, up sharply from €381 billion in 2025.
The main reason for this surge is that Donald Trump has pushed NATO to boost defense spending to 5% of the GDP over time. Also, there are concerns that Trump will use military power to get Greenland.
Meanwhile, Donald Trump has suggested that the US government should boost its defense spending to $1.5 trillion from slightly below $1 trillion today. This explains why other military contractors like Rolls-Royce, BAE Systems, and Babcock have soared this year.
Rheinmetall’s growth has accelerated
The most recent results showed that the company’s growth has accelerated in the past few months, helped by the soaring demand and its recent acquisitions.
Data showed that its backlog jumped to over €80 billion in 2025 from €54 billion a year earlier. Its backlog has narrowed to that of some American defense contractors like RTX, Northrop Grumman, and General Dynamics.
The results also showed that the company’s sales rose by 20% in the first nine months of last year to over €7.5 billion, with its defense business growing by 28%
Its margins have also done well in the past few months, with its operating profit margin rising to 11%. This margin growth will likely continue in the coming years. Also, its operating free cash flow rose to over €813 million.
Still, the main challenge for the company is that it has become highly overvalued. It has a trailing price-to-earnings ratio of 97 and a forward multiple of 50, which are higher than other companies like Nvidia and AMD.
Rheinmetall stock price technical analysis
RHM stock chart | Source: TradingView
The daily timeframe chart shows that the RHM stock price peaked at €1,999 in October last year and then retreated to a low of €1,417 in December.
It has now rebounded and is nearing the important resistance level at €1,999. It has now moved above all moving averages, which is a bullish sign.
However, the stock has formed a head-and-shoulders pattern whose head is at €1,999 and the shoulders are at €1,895. Its neckline is at €1,480.
Therefore, there is a likelihood that the stock will pull back in the coming weeks, potentially to the key support level at €1,700. This view will remain as long as it is below the right shoulder at €1,895.
However, a move above the key resistance level at €1,999 will point to more gains over €2,000, and possibly to have €2,225, the average estimate among analysts.
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