Rheinmetall Is About to Make a Lot of Money. Maybe Too Much

Shares in Rheinmetall AG, Germany’s biggest defense contractor, have been under pressure lately because of the apparently improved chances of peace in Ukraine.

Whatever you think of the likelihood of Volodymyr Zelenskiy accepting Vladimir Putin’s maximalist demands, there’s a bigger risk to the German weapon maker’s profit than a deal lessening Europe’s need to urgently rearm. The way I see it, the company may end up making an untenable amount of money for an arms manufacturer working for state customers. And that might provoke a government or competitive response that curbs its astonishing financial returns.