Given ongoing budget discussions, we have analyzed Germany''s national budget and defence spend in detail. With geopolitical conflicts not abating at all, but support from the U.S. potentially fading, the role of Germany makes c. 2% of GDP spend, in line with the NATO target, almost inevitable in our view, which implies an incremental revenue opportunity of c. EUR 3bn for RHM, in Germany alone. We thus reiterate our O/P and EUR 350 TP for RHM, which remains underappreciated as the stock has barely rerated despite a tripling in the share price since the Ukraine war started. Prior underinvestment and geopolitical conflict push Germany to spend ~2% of GDP on defence While the latest MOD release in regards to the exemption of both the ordinary defence budget and the special fund from the general budget freeze provided a certain relief, there are still question marks around 2024 and beyond. Following our analysis of the German defence spend in prior years and in light of the country''s responsibility in Europe and globally given ongoing geopolitical conflicts, we believe Germany will (have to) spend c. 2% of GDP on defence, up to and beyond 2026. 15% share of wallet implies c. EUR 3bn revenue opportunity, in Germany alone Contributions from the special fund to the total defence spend have only just started and are expected to more than double y/y to reach EUR 19bn in 2024, getting budget close to the 2% GDP target. As the last NATO summit has foreseen spending at least 20% of the total budget on military procurement, RHM''s historical share of wallet of ≥15% implies a credible incremental sales potential of c. EUR 3bn vs. total defence sales of just above EUR 6bn in 2023e. Minimal rerating, yet, no premium despite significantly outperforming peers on core KPIs Benchmarking RHM against selected peers and the European Aerospace and Defence sector shows that despite doubling its operating margin and superior EPS growth, its 1Y FW PE is only up c. 10% versus the...