Hensoldt and Renk also reap profits: Rheinmetall shares plummet after soaring despite positive signs

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Price drop at Rheinmetall: Investors appear to be taking profits after reaching all-time highs. Analysts still see strong growth potential.

After a surprisingly strong start to trading, shares of German defense company Rheinmetall experienced a surprisingly strong start An unexpected robbery on Tuesday. The value recorded a sudden drop of more than ten percent and temporarily fell below the 500 euro threshold.

According to the financial portal “Der Aktionär” there is no direct news about this surprising development. However, after a long period of rising prices, it seems that investors have decided to cash in on the gains. The so-called stop-loss wave could also have contributed to this price drop.

Rapid price rise at Rheinmetall followed by sharp drop

On the same day, Rheinmetall shares reached an all-time high and received unanimous approval from analysts who expressed their confidence. After a series of successes that saw the stock reach new highs week after week, the stock suddenly saw a significant drop. As “Börse online” reports, the massive profit-taking caused the share price to fall by up to twelve percent in peak hours, before it was able to recover a little.

Positive outlook despite course correction

Despite the current price corrections, the company's prospects appear to remain favorable. A recent report by “Die Welt” mentions that Rheinmetall plans to equip the gun of the future Leopard 3 main battle tank with an even larger gun. These developments must be seen in light of increasing efforts to rearm within NATO, particularly with respect to the conflict in Ukraine.

According to statements by NATO Secretary General Jens Stoltenberg, according to “Börse online”, the international alliance should take a much more intense role in supporting Ukraine. Therefore, partner countries intend to provide Ukraine with military support worth 100 billion euros over the next five years.

Analysts continue to see great potential for the defense company.

Despite the recent turmoil, Rheinmetall shares are seen as having considerable potential. Investment bank Goldman Sachs recently increased its price target for Rheinmetall from 381 euros to a notable 606 euros, implying an increase of almost 60 percent. Bankhaus Metzler is even more optimistic about the future of the defense company and raised its target price from 550 euros to 705 euros.

The share prices of the other two German defense heavyweights, Hensoldt and Renk, also fell on Tuesday.

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