Rheinmetall boasts a 19% chance of success.
After the recent drop in share prices, Rheinmetall's stock market could offer promising opportunities. Additionally, investors can enjoy high returns through bonus certificates with a cap if the share price continues to decrease further.
Since its highest point of €571.80 on April 9, 2024, the Rheinmetall share has been in a steady consolidation. The share price dropped to €504 by May 14th, 2024 after investors decided to sell their shares. Overall, Rheinmetall shares are still up 71% since the beginning of the year, with a current price of €513.
Regardless of the mixed financial quarter results, experts still hold their buy recommendations for Rheinmetall stocks. Their optimism stems from the ongoing strong order situation, as well as the confirmation of the outlook with price targets of up to EUR 606 (from Goldman Sachs).
The investment strategy
Risk-takers may see the lower share price as a chance for a favorable entry into the Rheinmetall share, which is moderately undervalued. As an alternative to acquiring shares directly, investors can achieve positive returns through bonus certificates with or without caps. By doing so, the potential price risk of a direct stock purchase is reduced. Bonus certificates allow for attractive annual gross returns in the double-digit percentage range, even if share prices remain stable or decline.
How does it work?
If the Rheinmetall share never goes below the barrier of €375 euros by the certificate's maturity date, the bonus certificate with a cap will be redeemed with the maximum payout of €600 on June 27, 2025.
Important information
The HSBC bonus certificate with a cap (ISIN: DE000HS5KYT8) has a bonus level and a cap set at €600. The cap puts a limit on the maximum payout amount of the certificate. The activated barrier, valid until the valuation date (June 20, 2025), is €375 euros. Currently, investors can purchase the certificate for €502.87, resulting in a premium price compared to buying the share directly.
The benefits
As the bonus certificate can currently be bought for €502.87, it offers a gross return of 19.32% (or 17% annually) until June 2025 if the share price never falls by 26.90% to €375 or under by the maturity date.
Cautionary measures
If the Rheinmetall share touches the barrier at €375 euros by the valuation date and is valued under the cap of €502.87, the certificate will be redeemed at the stock's closing price on the valuation date. For investors, a loss would be incurred if the purchase price of the certificate is lower than this amount.
This article does not provide a recommendation to buy or sell Rheinmetall stocks or investment products related to the company. No responsibility is assumed for the accuracy of the data.
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- Given the current Drop in Rheinmetall's share prices, some investment advisors, such as Goldman Sachs, are seeing it as an opportunity for investors to secure 'Securities' in the defense industry giant, with potential high returns.
- The 'DAX' listed company Rheinmetall, despite its recent drop in share price, has a robust presence in the 'Defense industry', particularly notable for its production of advanced 'Armor'.
- Despite the recent 'Attack on Ukraine', the demand for Rheinmetall's defense solutions has remained strong, contributing to the overall financial stability of the company.
- As an investment tip, some securities analysts recommend buying 'Rheinmetall' stocks, citing the company's 19% chance of success in upcoming contracts and the ongoing strong order situation as reasons.
- In light of the ongoing geopolitical tension and potential threats, investors interested in the 'Defense industry' may consider Russia as a potential market for 'Rheinmetall' stocks, given its emphasis on military modernization.
- Cautious investors might prefer to invest indirectly through 'Bonus certificates' with a cap, offering attractive annual returns and a reduced price risk, even if the share prices remain stable or decline.
Source: www.ntv.de
