RNMBY - Rheinmetall: Why I Am At A 'HOLD'

2024-03-05 08:15:38 ET

Summary

• Rheinmetall's valuation has become untenable, with a normalized blended P/E of 29x and a yield below 1%.
• Analysts have assigned ridiculous valuation levels to Rheinmetall, ignoring the risks associated with the geopolitical situation.
• While the company is poised for growth in the defense market, the inflated valuation does not justify the potential upside.

Dear readers/followers,

Oh, how I wish that I had invested more in Rheinmetall ( RNMBF ) ( RNMBY ) prior to the Ukraine war. The company obviously was nowhere close to these forecasts, most of which are entirely related to the geopolitical situation change that we've seen since then, but it could have been viewed as a cheap company at this time.

Of course, much of the same could be said about many of the companies in the defense or adjacent sectors over the past 2 years or so. People who invested in the sector prior to the Russian invasion of Ukraine made a very good RoR, not just in European companies, but on an international basis....

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