(BFM Stock Exchange) – The German company has delivered results and prospects that are not lower than expectations. But whatever, the market still propels the value, aware that the company of Düsseldorf is likely to revise its goals up for 2025.

Thinking that industrial values ​​cannot sign colossal increases on the stock market remains a big mistake. In Europe, at least two groups record progressions that do not have much to envy those of large American tech groups.

The first is the engine manufacturer Rolls Royce, specializing in large carriers, who has taken 716% for three years.

The second is Rheinmetall, a defense company that provides combat armored vehicles, military logistics vehicles, weapons, ammunition … and car equipment.

The company based in Düsseldorf has seen its course take off from the breakdown of the conflict in Ukraine to which it is also directly exposed via the supply of ammunition or armored vehicles. The company also benefited from the increase in German military budgets.

The recent declarations of European leaders, with for example the “Rearm Europe” plan, which provides for 800 billion euros in military spending, have fueled optimism on action.

Just as, last week, the decision of the future German government to unlock hundreds of billions of euros to strengthen its defense, even if it means reforming budgetary rules.

Since the start of the year, Rheinmetall has been taking 102%. And since the breakup of the war of war in Ukraine in late February 2022, the action took 1,161% (or more simply it has been multiplied by twelve). From 4-5 billion euros, its stock market capitalization has now increased to 53 billion euros.

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Results that fly away

This Wednesday, Rheinmetall won another 8.5% on the Frankfurt Stock Exchange, while, however, the company delivered annual results without much surprise.

The accounts published by the company reach records on all floors. Sales increased by 36% over one year to 9.8 billion euros. To give an idea, the income of the German group almost doubled compared to 2021 (5.7 billion euros).

“Like the previous two years, the 2024 exercise was characterized by significant increases in sales in the defense technology divisions, which have benefited from the increase in demand in the wake of the reversal of the security policy,” said Rheinmetall.

Orders’ sockets reached a record of 55 billion euros after 38 billion in 2023. The “Book to Bill” ratio, that is to say the controls relating to turnover, reached the aberrant level of 5.6.

The operating profit jumped 61% to 1.48 billion euros and net profit per share increased by 42% to 20.75 euros. The company also generated 1.05 billion operational cash flows, three times more than in 2023.

According to consensus cited by ODDO BHF, analysts expected a little better on income (9.9 billion euros) and profit per share (2.07 euros) and a little less on operating profit (1.38 billion euros) and especially on the cash flow (784 million).

For 2025, Rheinmetall tries to grow income from 25% to 30% and an operating margin of 15.5% after 15.2% in 2024. According to ODDO BHF, consensus awaited an increase in income of 29.5% and a margin of 15.5%.

To objective recovery during the year

Ultimately, the results and forecasts of the German group are a bit fair in view of expectations. “But who is concerned?” Asks with relevance Stifel.

Rheinmetall clarified that his prospects did not take into account “the potential improvement expected on the particularly important markets for Rheinmetall in Europe, Germany and Ukraine, following geopolitical developments in recent weeks”.

“Rheinmetall will therefore proceed to the necessary adjustments of its forecasts as the respective requirements of military customers are cleared during the year,” added the company.

In other words, the company is likely to raise its objectives during the year. We can better understand the reaction of the title to the Frankfurt Stock Exchange.

“Under normal conditions, we would expect the action to be decreasing due to the lower results than expected from the fourth quarter of the year 2024 and the more modest forecasts than anticipated for the year 2025,” explains Stifel in a note published before the opening of the market.

“However, taking into account the potentially important orders in the field of European rearmament and the indication by Rheinmetall of an upward revision of his forecasts, we believe that this will only play a minor role,” concludes the design office.

Oddo BHF has reiterated its advice to “neutral”, judging the potential for increasing the action is now largely integrated by the market while negative elements could penalize the title, such as a cease-fire in Ukraine.