FRANKFURT (dpa-AFX) - JPMorgan sees significant upside potential for Rheinmetall shares after the recent slowdown in their record rally. With its new price target, the US bank is now one of the most optimistic players on the market. After continuing their recent downward trend with losses on Thursday, shares rose by 0.7 percent to 1,711 euros on Friday in a weak market environment.
JPMorgan raised its target price for the defense and automotive supplier from 2,100 to 2,250 euros. This corresponds to a price potential of around one-third. Only the investment bank Exane BNP is currently slightly higher at 2,300 euros.
In a preview of the upcoming second-quarter figures, JPMorgan expert David Perry raised his earnings estimates for 2030 by up to 21 percent. However, he does not believe that 2030 will be the peak. This is because Germany will need at least another decade to rebuild its military capabilities.
Perry believes that German defense spending will exceed that of other European countries. Potential orders worth €70 billion are expected in the next twelve months. Against this backdrop, he described Rheinmetall as the favorite among Europe's major arms manufacturers.
However, Rheinmetall shares have already been off their record highs for several weeks now. The record high of €1,944 was reached at the beginning of June. Since then, the shares have been paying tribute to their price rally, which began in early 2022 with Russia's invasion of Ukraine and is linked to the subsequent increase in defense spending by many European countries. While prices of around 90 euros were still being paid before the war in Ukraine, the shares were worth more than 21 times that at their peak. /tih/edh/mis
