Shares of German defense corporations Rheinmetall (RHM) have more than tripled so far this year, and global investment bank (IB) UBS further raised its target price.
On the 28th, according to the financial investment industry, Sven Bayer, a UBS analyst, maintained a "Buy" rating on Rheinmetall and set a target price of 2,500 euros. This is 27.5% (539.5 euros) higher than Rheinmetall's closing price of 1,960.5 euros on the 26th (local time).
Rheinmetall's year-to-date share price gain stands at 224.6%. Expectations for Rheinmetall's results have grown along with Europe's rearmament amid the prolonged Russia-Ukraine war.
Not only UBS but other global IBs are also issuing upbeat outlooks on Rheinmetall. For Rheinmetall's target price, Goldman Sachs suggested 2,200 euros, and JPMorgan suggested 2,250 euros. Jefferies and Deutsche Bank also issued "Buy" opinions.
However, as Rheinmetall's share price has risen steeply, the burden of valuation (corporation evaluation value) has increased. Rheinmetall's price-earnings ratio (PER, market capitalization ÷ net income) versus this year's estimated results comes to 70.3 times. Even applying 2026 estimated results, it is at the 46.2-times level.
Global IB Bernstein presented "Market Perform" as its initial investment opinion on Rheinmetall. It also set the target price at 1,960 euros, in line with the current share price.
Bernstein said Rheinmetall has "potential" as Europe's defense industry grows going forward, but noted that "time and additional investment are needed, and high market expectations could constrain further upside in the share price."