Rheinmetall: Fair Value Raised to EUR 730 Due to Vehicle Systems Growth and Bradley Deal Potential

Rheinmetall has a well-diversified portfolio across geographies and platforms, with 70% of its revenue from its defense business and 30% from its civil one. Escalating global security concerns are driving higher growth in the defense market as many countries in Europe have underspent since the Cold War ended. European nations are expected to boost defense budgets to a minimum of 2% of gross domestic product, a trend likely to accelerate due to the Russia-Ukraine war. This situation offers a significant opportunity for Rheinmetall to benefit from its well-diversified geographical presence and product portfolio. Rheinmetall generates over 30% of its revenue from Germany, 36% from other European countries, 16% from Asia (with a particular focus on Australia), and the rest from the US and other markets.