Rheinmetall shares plunge as Germany cancels F126 frigate program

The defense giant’s stock tumbled 13% after the government scrapped the naval contract, dragging down European peers and signaling a shift in Berlin’s procurement strategy.

By Handelsavisen Newsroom · Automated 2026-06-26 02:03 UTC · 1 min read

Rheinmetall AG (RHMG.DE) shares fell sharply on Wednesday, dropping approximately 13% as the German defense ministry confirmed it would cancel the F126 frigate program.

The decision to scrap the planned construction contract marks a significant reversal for the defense sector, which had been buoyed by years of increased military spending and a multi-year rally that saw Rheinmetall’s stock rise more than 1000% over the past five years.

This development follows earlier volatility, with Rheinmetall shares having dropped roughly 17% in early trading on Tuesday as initial reports of the potential cancellation emerged.

The sell-off extended beyond Rheinmetall, leading a broad decline across European defense stocks.

Investors are reassessing the pipeline of government contracts amid uncertainty over future procurement priorities.

The sharp repricing reflects concerns that the cancellation could signal a broader slowdown in capital-intensive naval projects, potentially impacting revenue forecasts for major defense contractors.

This development follows earlier volatility, with Rheinmetall shares having dropped roughly 17% in early trading on Tuesday as initial reports of the potential cancellation emerged.