Rheinmetall Earnings: Strong Results as Backlog Growth Outpaces Sales

Maintaining fair value estimate on Rheinmetall shares.

Loredana Muharremi 13 March, 2025 | 4:39PM
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What We Thought of Rheinmetall’s Earnings

Wide-moat Rheinmetall RHM delivered strong full-year results and guided for EUR12 billion revenue in 2025 and EUR30 billion by 2030. Guidance does not yet incorporate further defense spending potential. We maintain our EUR1,310 fair value estimate, as we assess the latest EU defense proposals. We believe the company remains well positioned to capitalize on Germany’s Zeitenwende 2.0 and increasing European defense budgets.

Backlog growth continues to outpace sales, increasing 45% year over year from EUR38 billion in 2023 to EUR55 billion in 2024. Over the next 12 months, Rheinmetall expects up to EUR40 billion in new orders, further solidifying its multiyear revenue visibility.

Key Morningstar Metrics for Rheinmetall

· Fair Value Estimate: EUR1,310

· Morningstar Rating: ★★★

· Morningstar Economic Moat Rating: Wide

· Morningstar Uncertainty Rating: Medium

2024 revenue grew 36% to EUR9.8 billion, driven by strong defense execution, while the civil segment declined 2% because of weak automotive and industrial demand. All three defense divisions expanded by more than 30%, with land systems (up 35%) and ammunition (up 36%) as the primary growth drivers, fueled by strong tank, infantry fighting vehicle, military truck, and 155mm artillery orders. Electronic solutions (up 33%) benefited from secure communication and digitization contracts.

Operating profit surged 61% to EUR1.48 billion, supported by economies of scale, a shift toward high-margin ammunition contracts and aftermarket services, and expanding digitization programs. Defense margins reached 19%, slightly ahead of expectations, with further upside from vertical integration and procurement efficiencies.

2025 marks a key inflection point, as German and NATO defense orders make the transition from backlog to production, driving faster revenue conversion and margin expansion. The Zeitenwende 2.0 policy shift and NATO’s growing defense spending will accelerate this momentum. Additionally, new ammunition plants and vehicle production facilities coming online in 2025 will further support Rheinmetall’s capacity increase.


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Loredana Muharremi  is an equity analyst at Morningstar

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