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On Friday, BNP Paribas (OTC:BNPQY) Exane analysts increased the price target for Rheinmetall (ETR:RHMG) AG (RHM:GR) (OTC:RNMBY) to €2,300 from €1,500, maintaining an Outperform rating. The analysts highlighted Rheinmetall’s position as a leading defense system integrator with robust margins across its product offerings, ranging from mid to high teens and up to 30%.
Rheinmetall is projected to achieve a sales compound annual growth rate (CAGR) of over 25% from 2024 to 2027. This growth is supported by a substantial order backlog of €63 billion as of the first quarter of 2025, which may increase to over €90 billion by the end of the year. The analysts identified several potential opportunities for Rheinmetall, including a high capture rate in Europe, involvement in large U.S. vehicle programs, active sector consolidation, exiting Power Systems, and returning cash to shareholders.
The company’s stock has surged approximately 200% year-to-date and has increased tenfold since the onset of the war in Ukraine. Despite this significant rise, Rheinmetall’s valuation remains reasonable, trading at 26x/19x EV/EBIT for 2026/2027 estimates, according to the analysts. They anticipate a 30% adjusted EBITA CAGR from 2025 to 2030.
The revised price target reflects the analysts’ confidence in Rheinmetall’s potential for further upside, driven by increased procurement spending in Europe, mergers and acquisitions, and additional collaborations.
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