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On Thursday, Deutsche Bank (ETR:DBKGn)’s analyst, Christoph Laskawi, increased the price target on Rheinmetall (ETR:RHMG) AG (RHM:GR) (OTC: RNMBY) shares to EUR1,300.00, up from the previous EUR1,040.00, while reaffirming a Buy rating on the stock. The adjustment follows Rheinmetall’s disclosure of a scenario analysis regarding European NATO defense spending, which the company believes could significantly boost its growth trajectory.
Rheinmetall has indicated its capability to substantially scale up defense production, asserting that it can multiply its current output should it receive the anticipated orders. This confidence is backed by the company’s effective management of bottlenecks in production processes. Detailed insights are expected to be revealed after political decisions translate into firm orders, likely within the next quarter.
Laskawi noted Rheinmetall’s strong momentum in the market and suggested that, despite high expectations, the firm’s revenue could potentially increase fourfold to fivefold by the early 2030s, presenting further opportunities for upside. In addition to the optimistic growth outlook, Rheinmetall has also announced a significant increase in its dividend, raising it to EUR8.1 per share from EUR5.7. Despite this, the analyst views the dividend as a minor factor for the stock’s appeal in the current market climate.
The price target hike to EUR1,300 by Deutsche Bank is predicated on the recent disclosures by Rheinmetall and the analyst’s anticipation of the company’s continued robust performance and growth potential in the defense sector.
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