After strong consolidation, the Rheinmetall share is now on the way up again. Bonus certificates with a cap, which are much cheaper than shares, offer investors very attractive opportunities for returns in the coming months.
After the outbreak of war in Ukraine, the shares of the Rheinmetall armaments group started to soar, which caused the shares to rise from 100 euros in February 2022 to their high for the year of 227.90 euros by the end of June 2022. After a price correction of up to EUR 140, the share - accompanied by violent price fluctuations - has now passed the EUR 200 mark again.
Since general upside potential is being forecast for the shares of armaments companies in the current armaments boom, experts in the latest analyzes with price targets of up to 265 euros (JP Morgan Chase) reinforced their buy recommendations for Rheinmetall shares.
The investment idea
Investors who are considering an investment in Rheinmetall shares following the most recent consolidation and who at the same time want to reduce the price risk of direct share investments could consider investing in a bonus certificate with a cap as an alternative to buying shares directly.
Bonus certificates with a cap enable high yield opportunities not only when the Rheinmetall share price rises, but also when prices move sideways or fall significantly. As a counter-trade for the attractive sideways opportunities, certificate investors have to forego the unlimited profit potential of the share investment and the dividend payments.
The way it works
If the Rheinmetall share never touches or falls below the barrier of 130 euros by the valuation date of the certificate, then the bonus certificate with cap will be repaid on December 21, 2023 with the bonus amount of 190 euros.
The key data
The BNP Paribas bonus certificate with cap (ISIN: DE000PE6QV3) on Rheinmetall shares has a bonus level and cap of EUR 190. The cap defines the maximum payout amount of the certificate. The barrier activated until the valuation date, December 15, 2023, is 130 euros. With the Rheinmetall share price of EUR 205.85, investors were able to purchase the certificate for EUR 162.35. The certificate is therefore 21.13 percent cheaper than the share.
The chance
Since investors can currently buy the certificate with 162.35 euros, it allows for a gross return of 17.03 percent in a little less than a year if the share price never falls by 36.84 percent to 130 euros or below by the valuation date.
The Risks
If the Rheinmetall share price touches the barrier of EUR 130 by the valuation date and the share is listed below the cap on the valuation date, the certificate will be redeemed at the Rheinmetall share's closing price fixed on the valuation date. If this is found to be below EUR 162.35, the purchase price of the certificate, then investors will suffer a 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 correctness of the data.
