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Investing.com - Bernstein SocGen Group initiated coverage on Rheinmetall AG (ETR:RHM) (OTC:RNMBY) with a Market Perform rating and a price target of EUR1,960.00.
The research firm cited Rheinmetall’s superior growth and margin profile compared to European defense peers, which justifies a 10% premium in its valuation model based on discounted 2029 EBITDA forecasts.
Bernstein believes Rheinmetall will maintain its dominant market share with resilient demand expected across key divisions in the coming years, along with potential to expand its offering to position itself as a long-term winner in European defense.
Despite these strengths, the firm sees limited upside potential at current price levels, noting that the transition to an expanded offering will require time and investments, while high market expectations partly driven by the company’s recent success constrain further gains.
Bernstein identified peers such as BAE Systems as better positioned to capture defense sector opportunities with more attractive risk-reward profiles, while also expressing concerns about owning "the highest beta stock ahead of a potential improvement of the situation in Ukraine."
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