Rheinmetall with 20 percent opportunity
Following the publication of good quarterly figures, Rheinmetall shares rose to a new high. With bonus certificates with a cap, investors can achieve high returns even if the share is unable to maintain its high level.
Since the beginning of October 2023, when the Rheinmetall share was still trading at €230, it has enjoyed a remarkable upward trend. Most recently, the convincing figures for the first three quarters of the year and the confirmation of the annual forecast pushed the share price to a new high of €284.50.
Due to the high profitability and strong order intake, experts reiterated their buy recommendations for Rheinmetall shares after the figures with price targets of up to 340 euros (JP Morgan Chase).
The investment idea
Due to the positive news situation, an investment in Rheinmetall shares, which are classified as slightly undervalued, could still be interesting for investors even at the historically high price level. Anyone wishing to reduce the undoubted price risk of a direct share investment could consider buying a bonus certificate with a cap on the Rheinmetall share. These certificates enable high returns even if the share price falls sharply.
Apart from dividend payments, the direct purchase of Rheinmetall shares will only generate positive returns if the share price rises. With bonus certificates with and without a cap, investors can achieve annual gross yields in the double-digit percentage range not only if the share price rises, but also if the share price stagnates or falls.
How it works
If the Rheinmetall share never touches or falls below the barrier of 200 euros by the valuation date of the certificate, the bonus certificate with cap will be redeemed on December 31, 2024 with the maximum redemption amount of 354 euros.
The key data
The Société Générale bonus certificate with cap (ISIN: DE000SW1J127) on Rheinmetall shares has a bonus level and cap at EUR 354. The cap defines the maximum payout amount of the certificate. The barrier activated until the valuation date, December 20, 2024, is at 200 euros. At Rheinmetall's share price of 279.85 euros, investors could purchase the certificate at 295.84 euros.
The opportunities
As the certificate can currently be purchased at EUR 295.84, it offers a gross yield of 19.66% (or 17.50% per year) until December 2024 if the share price never falls by 28.53% to EUR 200 or below by the valuation date.
The risks
If the Rheinmetall share touches the barrier at 200 euros by the valuation date and the share is quoted below the cap on the valuation date, investors will receive one Rheinmetall share for each certificate. If this share is sold below EUR 295.84, the purchase price of the certificate, the investment will result in a capital loss.
This article does not constitute a recommendation to buy or sell Rheinmetall shares or investment products based on Rheinmetall shares. No liability is assumed for the accuracy of the data.
Source: www.ntv.de
