The Düsseldorf-based German defense contractor, Rheinmetall (RHM.DE) gains 6% today, and its shares are rising to the 1-month high. This year, Rheinmetall is the second-strongest DAX performer (after Siemens Energy), with 80% rally year-to-date.
- Company commented that its experiencing growth 'like we have never before in the Group' amid Ukraine war; company raised its profitability target for the FY 2024. Rheinmetall doesn't expect that Trump win will have any impact on its defense programs for the United States of America, with takeover American company Loc Performance. CEO Armin Papperger said that United States will be a strong core market for the group, which build industrial base in the country, and 'It doesn't matter who is president in the USA."
- Incoming orders rose 48% YoY to 21 billion euros ($22.61 billion) from January to September due to contracts from the Bundeswehr and related to Ukraine military aid. A backlog hit a new record at 52 billion euros and is expected to reach 60 billion euros by the year end. The company expects to reach the threshold of about 10 billion euros in yearly sales, first time this year, after sales rose 36% from January to September to 6.3 billion euros (German clients at almost 1/3 sales).
- Now the group is preparing to double annual sales to 20 billion euros in a few years. German contracots narrowed its full-year operating margin guidance, currently aiming for the upper end of the guidance for 14-15% this year (11.3% in the first nine months). According to J.P. Morgan analysts, Rheinmetall will be probably be a long-term winner, but currently it faces near term uncertainties amid Russia-Ukraine ceasefire and political storm in Germany.
Rheinmetall (D1 interval)
On the chart, we can see a potentially bullish flag pattern forming, with technical aspects driving the test of the price channel resistance zone near 530 EUR. The major resistance zone is set at 570 EUR, with two previous local peaks. The stock defended the decline, respecting EMA200 support (the red line).
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Source: xStation5
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