Defense rally after summit flop? Rheinmetall, Hensoldt, Volatus Aerospace!

Volatus Aerospace: Switching to rally mode?

At the beginning of the summer, the capital market discovered the shares of Volatus Aerospace. Driven by orders from NATO countries, the share price multiplied. Following the recent setback, the stock could now take off again thanks to the tailwind from the summit flop: The capital increase was completed on Friday, and the latest news shows that Volatus also has a lot of potential in the non-military sector.

Background: As a drone specialist, Volatus Aerospace now offers complete solutions worldwide, ranging from pure aerial reconnaissance and freight services to AI-supported inspections, for example, for pipelines or buildings. Drones can be remotely controlled globally from the situation center near Toronto, which also serves as a training hub for drone pilots. The Company focuses on public safety, critical infrastructure, energy facilities, and increasingly, defense. Instead of building its own drones, Volatus relies on partnerships with various manufacturers, supplements the aircraft with its own technology and thus provides customized solutions tailored to the specific requirements of its customers.

Analysts at Ventum Capital Markets expect Volatus to double its revenue to around CAD 52 million in the current year. By 2027, this figure is expected to reach CAD 83.3 million. Experts consider Volatus' strategic decision to switch to non-Chinese technology this year to be a smart long-term move, even if it has cost the Company growth in the short term. This shift is seen as particularly critical for gaining traction in the military sector.

But it is not just defense potential that speaks in favor of the stock. The Canadians recently announced the launch of the Condor XL program for heavy-lift drones. This is a modern platform designed to meet global demand for autonomous heavy-lift drone solutions. According to a study by Lucintel, the global market for heavy-lift drones is projected to grow at double-digit rates per year, reaching a volume of USD 1.4 billion by 2030.

Putin and Trump: Only one winner

The summit meeting between Trump and Putin in Alaska was criticized by the world press as a massive staged event with little substance: Despite "friendly gestures" and symbolic moments – such as riding together in a limousine and military flyovers – there was no breakthrough. No ceasefire was agreed, nor was there a concrete peace agreement, although both sides spoke of "progress" without giving any details. Western media expressed skepticism, saying that Trump had at least avoided making any significant concessions, while Putin gained international legitimacy through the meeting.

Away from the big stage, the media coverage itself also came under scrutiny. Russian journalists complained about poor accommodation – from makeshift camp beds to restricted communications – which was partly attributed to poor planning. Putin is highlighted as the symbolic winner. He has consolidated his position, while Trump was unable to present any tangible results. Conclusion: The war in Ukraine will continue with full brutality, and the West's relationship with Russia remains at a low point.

Rheinmetall & Hensoldt: New momentum after summit flop

Will the summit flop give Rheinmetall and Hensoldt shares new momentum? They could use it. Unlike RENK, both companies disappointed shareholders with their latest quarterly figures. In particular, order intake fell short of expectations. There was no sign of a defense boom or super cycle. As a result, Hensoldt shares have lost around 18% of their value since mid-July. Rheinmetall shares lost more than 20% at one point, but recovered somewhat by the end of the week. Nevertheless, the EUR 2,000 mark is now out of sight for Germany's largest defense contractor. This could now change again.

A personnel announcement last week showed that not everything is running smoothly at Rheinmetall. On Thursday, it was announced that Chief Human Resources Officer Dr. Ursula Biernert-Kloß will leave the Company at the end of the month. She had been in office for less than a year. The defense company cited "differences in opinion regarding strategic issues" as the reason. The separation is by mutual agreement. Her successor has already been appointed. Dr. Vera Saal will join the Executive Board on September 1, 2025. She has held various HR management positions within the Rheinmetall Group for 15 years.

The personnel change is unlikely to have any impact on the share price. Deutsche Bank recently reaffirmed its "Buy" recommendation. Although the DAX-listed company did not meet expectations in the first half of the year, the outlook was confirmed. Analysts see the fair value of Rheinmetall shares at EUR 1,950.

The supercycle in the defense industry is likely to continue regardless of a peace agreement, which, unfortunately, is not in sight, in Ukraine. Volatus is a very promising company in the drone sector, with a strong second pillar outside of military applications. The chances are good that the correction in the share price is over. Rheinmetall remains a core investment in the defense sector. However, as with Hensoldt, order intake must pick up in the second half of the year.