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Bernstein analyst Adrien Rabier has reduced the price target for Rheinmetall AG to EUR 2,000 from EUR 2,050 while maintaining an Outperform rating. This adjustment reflects a sector correction impacting Rheinmetall due to its exposure to Ukrainian support and short-cycle products.

The stock has seen a significant decline over the past three months but maintains a high P/E ratio of 92.91. Bernstein expresses caution regarding funding erosion risks for ground combat amidst a potential cease-fire and pricing pressures on short-cycle products.

Despite these concerns, demand remains robust with a substantial backlog in Ammunition and Vehicle businesses. Rheinmetall's 2030 profit projections are about 10% below consensus and over 20% below its targets, but Bernstein views current share prices as overly pessimistic. Rheinmetall plans to sell its civil business by Q1 2026 to focus on military operations and has secured a major contract from the Netherlands for air defense systems, with deliveries starting in late 2028.