Shares in German defence manufacturer Rheinmetall fell about 16.5% during Thursday morning trading after the company lowered its 2026 sales forecast for the second time in three months. The decline contrasted with gains across the broader European stock market.
The Düsseldorf-based group now expects annual sales of approximately €13.2 billion, down from its previous forecast of €13.7 billion to €14.2 billion. It also reduced its operating margin target to around 18.5%, compared with roughly 19% previously. The revised guidance was announced late on Wednesday.
Rheinmetall attributed the downgrade partly to delays in Germany’s Arminius Boxer armoured-vehicle programme. Revenue and advance payments associated with the anticipated contract are now expected to shift into next year. Slower approvals for artillery ammunition batches will also delay the recognition of sales.
The warning overshadowed stronger quarterly earnings. Third-quarter sales increased to €3.15 billion from €2.31 billion a year earlier, while operating profit rose 62% to €553 million. The quarterly operating margin improved to 17.5% from 14.8%.
Cash generation also came into focus. Although Rheinmetall still expects positive operating free cash flow for the full year, it withdrew its target for a cash conversion rate above 40% following the Arminius delay. The company had previously anticipated an advance payment exceeding €3 billion under the programme.
The sell-off highlighted investor concerns about how quickly Rheinmetall can turn growing European defence demand into completed contracts, deliveries and cash receipts. Analysts at Jefferies questioned the scale of the forecast reduction so late in the year, adding pressure on the company to demonstrate that its expansion plans remain achievable.
