The inclusion of Rheinmetall in the leading German index Dax gave the armaments and technology group a price jump on Monday. Thanks to the lively demand from investors, the shares in the armaments group rose by 5.4 percent to 249.90 euros at the close of trading. On its first day in the Dax, the group was at the top of the winners in the leading German index.
Rheinmetall is Germany’s largest armaments company. According to its own statements, the company is one of the three largest manufacturers of military vehicles and ammunition in the western world. Rheinmetall currently has a stock market value of over 10 billion euros. The share price has more than doubled since the Russian invasion of Ukraine a year ago. In its civilian areas, Rheinmetall is a supplier to the automotive industry, among other things.
In the first German stock exchange league, the Düsseldorf-based company replaces the dialysis specialist Fresenius Medical Care, which has been relegated to the index of medium-sized stocks, the MDax.
More acceptance in society
“We are pleased that not only the capital markets are giving us a significantly increased importance,” said Rheinmetall boss Armin Papperger according to a statement. Large sections of society also see the need to quickly and reliably equip the armed forces with modern equipment and armaments. Rheinmetall sees itself as part of national and European security precautions.
Rheinmetall employed 24,800 people on average last year, around 1,100 more than in the previous year. Papperger expects another 3,000 to join this year.
The company, which was founded in 1889, claims to have been listed on the stock exchange since 1894, when it was still called “Rheinische Metallwaaren- und Maschinenfabrik Actiengesellschaft”. In 1996, Rheinmetall was a founding member of the Mdax. Since then you have been in this stock index without interruption.
There was also backing for Rheinmetall from analysts. The increasing need for military equipment and increasing defense spending in Germany and other NATO countries contain attractive medium-term potential for the company, emphasized analyst Holger Schmidt from DZ Bank. Analyst David Perry from the US bank JPMorgan increased his price target for Rheinmetall from 265 to 310 euros. In his estimation, Rheinmetall is likely to be the main beneficiary of the lavish ammunition supplies to Ukraine. The rise in the Dax should also give the price a boost, as it will make the paper more interesting again for certain investors.
With a jump in price of around 32 percent, the Rheinmetall shares are clearly the best Dax value in what has been a relatively short year so far.
