We're raising Rheinmetall's valuation to EUR 730 from EUR 445 after factoring in the potential US M2 Bradley replacement contract and boosting our long-term earnings-growth rate assumption from 3% to 5%. Without the US contract, the fair value stands at EUR 680, still well above the current market price.
Rheinmetall is well positioned to capitalize on the 35% growth in the European defense budget during the next five years.
Rheinmetall depends on military funding for its sales, which is an inherently political and thus uncertain process.
|
Metric
|
RHM
|
GD
|
LMT
|
|---|---|---|---|
Price/Earnings (Normalized) | 45.51 | 23.39 | 16.76 |
Price/Book Value | 7.58 | 3.60 | 16.70 |
Price/Sales | 3.22 | 1.80 | 1.65 |
Price/Cash Flow | 25.69 | 19.40 | 13.91 |
|
Metric
|
RHM
|
GD
|
LMT
|
|---|---|---|---|
Quick Ratio | 0.54 | 0.76 | 0.99 |
Current Ratio | 1.29 | 1.44 | 1.21 |
Interest Coverage | 9.66 | 13.19 | 9.84 |
|
Metric
|
RHM
|
GD
|
LMT
|
|---|---|---|---|
Return on Assets (Normalized) | 5.77% | 6.58% | 12.47% |
Return on Equity (Normalized) | 19.03% | 17.44% | 82.57% |
Return on Invested Capital (Normalized) | 11.52% | 12.06% | 29.85% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
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