Other European defence stocks including Thales SA and Leonardo SpA have also soared. The test now is whether the companies can live up to the earnings growth expectations investors have placed on them, to match the headspinning advance in their share prices. That intensifies the focus on Rheinmetall’s results, due Wednesday.
A rush by European governments to boost military spending has unleashed a rally in defence stocks so strong that they’re now as richly valued as the region’s high-flying luxury names.
Shares in German tanks and ammunition producer Rheinmetall AG have jumped more than 90% this year. That’s pushed its valuation multiple to a record, somewhere between Dior owner LVMH and Birkin bag maker Hermès International SCA.
