In a recent interview, Armin Papperger, the CEO of Rheinmetall, Germany’s leading defense contractor, expressed his optimism regarding the company’s stock market value. Papperger anticipated a notable upswing in valuation, primarily attributed to the ongoing Ukraine war and the subsequent surge in defense expenditures across Europe.
According to Papperger, Rheinmetall’s projected operating income for 2025 is expected to reach a substantial sum, hovering around 1.5 billion euros ($1.6 billion), with a potential to reach 1.7 billion euros. In order to gauge a fair and justifiable valuation, Papperger suggested multiplying this anticipated income by a factor of 11 or 12, thus providing a rough estimation.
Based on this calculation, Papperger confidently stated that a realistic valuation of 17 billion euros could be attained by Rheinmetall over the medium term. It’s important to note that the current stock valuation for Rheinmetall stands at approximately 10.5 billion euros, considering the 2022 operating income of 754 million euros.
Significantly, Rheinmetall’s stock market value has surged threefold since December 2021, marking an impressive growth trajectory. Furthermore, the company achieved a significant milestone this year by joining Germany’s prestigious blue-chip DAX index.
It’s evident that Rheinmetall’s steadfast focus on manufacturing tanks, ammunition, and other essential war equipment has propelled its success and garnered substantial investor confidence. As the company continues to thrive amidst geopolitical tensions and increased defense spending, it remains well-positioned to further enhance its market value.
(Note: Currency conversion rate as of the time of writing: $1 = 0.9305 euros)