As of June 26, 2025, Rheinmetall AG's estimated intrinsic value ranges from $212.84 to $1180.67 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1180.67 | -32.1% |
| Discounted Cash Flow (5Y) | $953.90 | -45.1% |
| Dividend Discount Model (Multi-Stage) | $804.33 | -53.7% |
| Dividend Discount Model (Stable) | $514.03 | -70.4% |
| Earnings Power Value | $212.84 | -87.8% |
Is Rheinmetall AG (RHM.DE) undervalued or overvalued?
With the current market price at $1738.00, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Rheinmetall AG's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.78 | 0.9 |
| Cost of equity | 6.8% | 9.3% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 24.4% | 25.6% |
| Debt/Equity ratio | 0.03 | 0.03 |
| After-tax WACC | 6.6% | 9.1% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $954 | $44,176M | 86.1% |
| 10-Year Growth | $1,181 | $54,530M | 73.6% |
| 5-Year EBITDA | $514 | $24,103M | 74.6% |
| 10-Year EBITDA | $744 | $34,579M | 58.4% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $794M |
| Discount Rate (WACC) | 9.1% - 6.6% |
| Enterprise Value | $8,730M - $11,949M |
| Net Debt | $621M |
| Equity Value | $8,109M - $11,328M |
| Outstanding Shares | 46M |
| Fair Value | $178 - $248 |
| Selected Fair Value | $212.84 |
| Metric | Value |
|---|---|
| Market Capitalization | $79357M |
| Enterprise Value | $79978M |
| Trailing P/E | 105.39 |
| Forward P/E | 65.33 |
| Trailing EV/EBITDA | 6.80 |
| Current Dividend Yield | 31.81% |
| Dividend Growth Rate (5Y) | 24.27% |
| Debt-to-Equity Ratio | 0.03 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $354.20 |
| Discounted Cash Flow (5Y) | 25% | $238.47 |
| Dividend Discount Model (Multi-Stage) | 20% | $160.87 |
| Dividend Discount Model (Stable) | 15% | $77.10 |
| Earnings Power Value | 10% | $21.28 |
| Weighted Average | 100% | $851.93 |
Based on our comprehensive valuation analysis, Rheinmetall AG's weighted average intrinsic value is $851.93, which is approximately 51.0% below the current market price of $1738.00.
Key investment considerations:
Given these factors, we believe Rheinmetall AG is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.