(Update: share price developments, additional commentary, rewritten text)
FRANKFURT (dpa-AFX) - Defense stocks, which were already significantly weak before the weekend, extended their losses on Monday. Even TKMS, which had received a pre-market boost from well-received financial results, quickly turned negative, recently trading down 2.4 percent at 76.80 euros.
The naval shipbuilder confirmed its full-year guidance following growth in the first half. The manufacturer of submarines and surface vessels continues to benefit from high government military spending. The company, a subsidiary of the industrial group Thyssenkrupp, can rely on a record order backlog despite a decline in new business. One trader described the TKMS figures as solid at first glance. However, the general market sentiment suggests that the 'defense story' is now out of favor, meaning financial results are no longer sufficient to trigger a price recovery.
At Rheinmetall, the downward trend intensified on Monday morning. With the share price now below 1,200 euros, the stock was recently down 3 percent. On Friday, shares had already slumped following a critical note from JPMorgan. They are currently trading at their lowest level since April 2025 and have lost nearly a quarter of their value this year. Although Warburg Research considers the sell-off overdone and upgraded the shares to 'Buy', Rheinmetall failed to benefit from the move at the start of the week.
Shares of Renk tumbled by over 3 percent on Monday, following a sharp decline on Friday. Hensoldt also remained under pressure with similarly high discounts.
Defense stocks have been on investors' sell lists for some time - particularly in light of peace efforts in Ukraine. A sustainable ceasefire in Ukraine would remove the primary catalyst for the defense sector, analysts at Bernstein Research wrote on Monday.
Analysts see defense companies with a high revenue exposure to land systems, such as ammunition, tanks, and transport vehicles, as the most vulnerable. These include Rheinmetall and Renk, whose products are among those most intensively used in the Ukraine war./ajx/bek/mis
