Rheinmetall set for 2027 rebound as analysts forecast defence sector upswing

Analysts see a long‑term positive outlook for European defence stocks despite steep declines this year. Rheinmetall, the German weapons manufacturer, has lost about 46% of its share price since early 2025 and is trading around €978.

Morningstar defence analyst Loredana Muharremi expects market sentiment to improve by the end of 2026 and a strong upswing in 2027, driven by accelerating procurement in Germany as framework agreements become firm contracts and additional production capacity is used. She names Rheinmetall along with BAE Systems and Leonardo as the most attractive valuations at current levels.

Investors are cautioned to be selective, as the recovery may take time and not all defence firms will benefit equally. The trend reversal is projected for late 2026, with a more pronounced rise anticipated in 2027.