Leonardo vs. Rheinmetall: Defense Stock Performance Comparison
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 09 2026
0mins
Source: Fool
- Defense Industry Growth: In 2025, the global defense sector thrived with the S&P Global Aerospace & Defense Select Industry Index surging 51.5%, reflecting countries' urgent need to enhance military capabilities, particularly as U.S. military spending approaches $1 trillion, driving strong stock performance.
- Leonardo's Performance: Leonardo saw a nearly 24% increase over the past year and a five-year return of approximately 303%, with a stable 5% compound annual revenue growth rate and 14% earnings per share growth, underscoring its robust position in the U.S. defense market.
- Rheinmetall's Rise: Rheinmetall achieved a remarkable 232% return in the past year and about 1,880% over five years, fueled by the German government's commitment to invest €650 billion over the next five years to meet NATO's 3.5% GDP defense spending target, rapidly elevating it to the fourth-largest defense spender globally.
- Future Outlook: Rheinmetall projects a 30% compound annual growth rate in sales and a 45% compound annual growth rate in backlog, alongside a 270 basis point increase in operating margin since 2023, indicating strong growth potential in the defense sector.
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Analyst Views on DRS
Wall Street analysts forecast DRS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for DRS is 47.33 USD with a low forecast of 40.00 USD and a high forecast of 54.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Analyst Rating
4 Buy
2 Hold
0 Sell
Moderate Buy
Current: 41.300
Low
40.00
Averages
47.33
High
54.00
Current: 41.300
Low
40.00
Averages
47.33
High
54.00
About DRS
Leonardo DRS, Inc. is a provider of advanced defense technology to the United States national security customers and allies around the world. It specializes in the design, development and manufacture of advanced sensing, network computing, force protection, and electric power and propulsion, and other mission-critical technologies. It is a provider of defense products and technologies that are used across land, air, sea, space, and cyber domains. Its segments include Advanced Sensing and Computing (ASC) and Integrated Mission Systems (IMS). The ASC segment designs, develops, and manufactures sensing and network computing technology that enables real-time situational awareness required for operational decision making and execution by its customers. The IMS segment designs, develops, manufactures, and integrates power conversion, control and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, transportation and logistics systems.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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