Rhine-based metal has a probability of 17% occurrence.
Following a robust surge at the start of the year, the Rheinmetall share is currently in a volatile, back-and-forth pattern. Bonus certificates, capped at a specific level, can potentially yield significant gains even if the share drops nearly a third of its current value.
The Rheinmetall share kicked off the first quarter of 2024 with a noteworthy price surge. Reaching a peak of 571.80 euros on April 9, 2024, the share then entered a fluctuating phase. Within this phase, the share price oscillated between 470 euros and 560 euros, even as it currently trades at 501 euros - highlighting an 88% increase in value over the previous 12 months.
Analysts at Deutsche Bank have maintained their "hold" recommendation for the share, raising their price target from 510 euros to 550 euros, based on the anticipation of Rheinmetall meeting its 2027 sales targets and profit growth across all defense sectors.
Investment Strategy
Investors who seek to invest in the still slightly discounted Rheinmetall share, and wish to minimize direct share purchase risk, yet aim for high returns, may find the bonus certificate with a cap and a substantial safety margin appealing.
While dividends are the only source of returns from direct share purchases, unless the price rises, bonus certificates with and without caps offer investors the opportunity for high, double-digit percentage annual returns, regardless of the share price trend - whether it ascends, remains stagnant, or decreases.
Functionality
If the Rheinmetall share remains above or does not drop below the 351.25 euros barrier by the certificate's assessment date on December 30, 2025, the bonus certificate will be redeemed at a bonus value of 590.00 euros.
Important Data
DZ Bank's bonus certificate with a cap (ISIN: DE000DQ9AGN7) on the Rheinmetall share has a bonus level and cap of 590.00 euros. The cap limits the maximum redemption amount of the certificate. The barrier is active until the assessment date, December 19, 2025, and is set at 351.25 euros. Currently, investors can buy the certificate for 505.92 euros.
Prospects
Since the certificate is now available for 505.92 euros, it offers the potential for a gross return of 16.62% (equivalent to 14% each year) in 14 months, if the share price does not dip by 29.89% to 351.25 euros or below by the assessment date.
Risks
If the Rheinmetall share touches the 351.25 euros barrier and is trading below the cap by the assessment date, the certificate will be redeemed at the share's closing price on that day, but only up to the cap. If the cap is set below 505.92 euros, investing in the certificate might result in losses.
This content does not propose any recommendation to buy or sell Rheinmetall shares or investment products tied to Rheinmetall shares. No liability is assumed for the accuracy of the data.
Investors who are interested in the Rheinmetall share and are looking for an alternative with potential for high returns, even in a volatile market, might find the bonus certificate with a cap appealing. Other investors, who are cautious about direct share purchases and want to minimize risk, might consider this as an alternative investment opportunity.
