Rheinmetall buys Mangalia shipyard for €138M in naval push

Rheinmetall acquired Romania's Mangalia shipyard for €138 million ($155 million) on October 19, according to the company. The German defense contractor will reorganize the facility into separate civilian and military production zones, partnering with MSC to expand its shipbuilding capacity.

The purchase puts Rheinmetall deeper into Eastern European naval manufacturing, a segment that has drawn more European defense spending as countries modernize their fleets. Rheinmetall, a $55 billion market cap supplier of armored vehicles, artillery and air defense systems to NATO members, already operates several vehicle plants in the region.

GuruFocus says the stock is modestly undervalued by about 19.5% based on its GF Value metric, which pegs intrinsic worth at $1,476.84 compared with the current $1,189.21. The trailing P/E of 66.15x is well above the five-year median of 38.74x, though it sits near its one-year low, indicating some valuation compression since the broader defense rally, the analysis platform noted.

The GF Score, a composite of five sub-ranks, rates Rheinmetall at 80 out of 100, reflecting strengths in growth and valuation, GuruFocus data shows. Profitability is also solid, with operating margins expanding. Momentum ranks lowest, a sign the stock's recent price trend has lagged its fundamental improvement. Financial strength is moderate, held back by ongoing debt issuance and a relatively high dividend payout ratio.

Insider activity over the past three months included one purchase of 525 shares, with no sales, according to GuruFocus. No large institutional changes were flagged by the data set.

The Mangalia acquisition adds naval construction to Rheinmetall's defense portfolio at a time when European countries are pushing to increase military capacity after Russia's invasion of Ukraine. The shipyard will handle both commercial repairs and government warship contracts, the company said.