JPMorgan placed German defense company Rheinmetall on its 'Negative Catalyst Watch' list. This signals potential downside risk for the stock. The bank maintained its 'Neutral' rating on the shares. Rheinmetall's stock recently traded below €1,000. This marks the first time since July.
Analysts at the U.S. bank expressed skepticism ahead of Rheinmetall's capital markets day in November. They cite concern about a potential shift in the company's revenue mix. This shift moves from highly profitable legacy products, such as ammunition and manned vehicles, to newer areas like drones and autonomous systems. Joint ventures often develop these newer products. This could result in lower profit margins on Rheinmetall's balance sheet.