Rheinmetall AG (RHMG.DE) shares fell sharply on Thursday, dropping approximately 16% in early trading as concerns mounted that the German government may cancel the F126 frigate program.
The steep decline marks a continuation of the selling pressure that began Wednesday, when the defense giant's stock tumbled 13% to lead a broad selloff across European defense contractors.
The market reaction underscores the critical importance of the F126 project to Rheinmetall's growth outlook.
The frigate program, a cornerstone of Germany's naval modernization efforts, represents a significant long-term revenue stream for the company.
Reports indicating a potential cancellation have triggered a repricing of the stock, with investors weighing the risk of lost contracts against the company's broader portfolio.
The uncertainty surrounding the F126 program has rippled through the sector, affecting peers such as Thyssenkrupp Marine Systems (TKMS), which is also heavily involved in the project.