Jefferies Signals Value Return for European Armored Vehicle and Munitions Sector

Apr 21, 2026 09:59 UTC

RHN.DE

Short term

Analysts suggest European makers of armored vehicles and ammunition are now attractive following a price correction. The sector saw a rotation toward air defense systems following the escalation of conflict involving Iran.

Jefferies identifies value in armored vehicles and ammunition
Market rotation shifted focus from ground systems to air defense
European defense basket doubled since early 2025
Basket declined >5% since late February attacks on Iran
Rheinmetall AG highlighted as a key player in the armored vehicle space

Jefferies analysts are advising a pivot back toward European armored vehicle and ammunition manufacturers, arguing that these assets have become undervalued after a recent market slump. The shift comes as investors previously rotated capital into air defense systems following the outbreak of war involving Iran, leaving traditional ground-based defense stocks lagging despite broader sector growth. According to data from Goldman Sachs, a basket of European defense names had doubled in value from the start of 2025. However, this basket has declined by more than 5% since the United States and Israel launched attacks against Iran in late February. The recommendation suggests a tactical opportunity for traders to capitalize on the 'war slump' in ground defense. Analysts anticipate a recovery as procurement needs diversify beyond immediate air defense requirements, potentially benefiting firms like Rheinmetall AG that specialize in armored capabilities.