Rheinmetall and HENSOLDT Stocks Surge Amidst Growing Demand for Defense Supplies
On Monday, Rheinmetall and HENSOLDT shares continued their remarkable climb, fueled by anticipations of heightened defense orders from Western nations to aid Ukraine against the ongoing Russian invasion. In XETRA trading, Rheinmetall witnessed a notable 2.65 percent increase, reaching 348.90 euros, while HENSOLDT saw a robust surge of 3.64 percent, reaching 31.28 euros.
Rheinmetall stocks reached yet another pinnacle, marking a year-to-date surge of over 20 percent, closely trailing behind the DAX leader, SAP SE. Conversely, HENSOLDT shares boasted an impressive 27 percent annual gain, positioning itself as a leading figure in the MDAX index.
The spotlight remains on the United States, with ongoing deliberations surrounding additional military aid to Ukraine. Chancellor Olaf Scholz, following discussions with US President Joe Biden, expressed confidence in continued US support.
In a notable interview with “Handelsblatt,” Rheinmetall’s CEO, Armin Papperger, outlined ambitious plans for a significant expansion in artillery shell production. The company aims to double or even triple its powder capacities to meet escalating demands. By 2025, Rheinmetall targets producing up to 700,000 artillery shells annually, ensuring ample supply for Europe’s defense needs.
Papperger emphasized the anticipated increase in defense budget following the expiration of the Bundeswehr’s special fund, underscoring the necessity of enhanced defense spending for robust self-defense capabilities.
The groundbreaking ceremony for Rheinmetall’s new ammunition factory in Lower Saxony, attended by prominent officials, symbolizes a substantial investment in bolstering defense capabilities. The facility, slated for completion in twelve months, will focus on producing artillery shells, explosives, and rocket artillery components, generating 500 new job opportunities with a 300 million euro investment.
These expansion endeavors are aligned with Rheinmetall’s overarching strategy to augment sales, with targets set at reaching up to 15 billion euros within two years and 20 billion euros within seven to eight years. The surging demand for defense supplies underscores the imperative of expanding production capacity, underscoring Rheinmetall’s unwavering commitment to fortifying global defense capabilities.
