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Defence company Rheinmetall will test drones, expand tank production ​and build a new logistics ‌centre in the central German city of Kassel, investing about €270 million ($314.31 million) ​in the projects, Chief ​Executive Armin Papperger said on Thursday.

Rheinmetall remains a Strong Buy, with Q2 results validating robust demand and execution despite prior delivery timing concerns. Q2 sales surged 69% year-over-year, operating margin expanded to 17.1%, and backlog reached €80.5 billion, offering exceptional revenue visibility. F126 frigate program cancellation reduced 2026 revenue guidance by €300 million, but group margin targets and growth trajectory remain intact.

Rheinmetall expects to generate initial revenue from joint production of ATACMS missiles with Lockheed Martin in ​Germany in 2028, CEO Armin Papperger told Reuters, with ‌demand likely to remain strong for at least 15 years.

Rheinmetall ETR: RHM reported sharply higher second-quarter sales and operating profit as demand for military vehicles, ammunition and air-defense systems accelerated, while the company lowered its 2026 revenue outlook following the loss of Germany's F126 frigate program.

Rheinmetall trimmed its 2026 guidance by 300 million euros, reflecting a cancelled order from the German government earlier this year. It came as the arms maker saw sales grow 39% and profits rise 74% in the first half of the year.