German Defense Sector: JPMorgan Optimistic about Rheinmetall, Hensoldt, and Renk

On Wednesday, JPMorgan showed confidence in the German defense sector, identifying an attractive entry point for Rheinmetall, Hensoldt, and Renk.

To support its optimism, the American bank predicts a 20% increase in the German defense budget by 2027. JPMorgan also highlights the 36% average decrease in German defense companies’ stock prices since October 2025.

This significant decline is attributed to the potential peace agreement between Russia and Ukraine, risks associated with increased production rates, and the changing nature of warfare, now dominated by drone technology over traditional military vehicles and ammunition, according to JPMorgan.

Exaggerated Concerns

While these factors need careful consideration, JPMorgan believes investors’ concerns are exaggerated and have already been largely factored into the stock prices.

As a result, JPMorgan reaffirmed its “overweight” recommendation for Rheinmetall and Renk, initiated coverage on the recently listed Vincorion with a buy rating, and maintained a “neutral” stance on Hensoldt, foreseeing a notable 15% potential increase.

By 3:50 PM, Rheinmetall’s and Renk’s stocks were up by 1.5% and 1.1% in Frankfurt, while Vincorion saw an 8% surge. Meanwhile, Hensoldt’s stock rose by 2.4%.

Agefi-Dow Jones The financial newswire