Defence stands out as a poster child of the MEGA trade with rising global investor interest for a key structural winner. But, after the recent rally, we need to be more selective. ReArm Europe aims to mobilise significant funds - and the step-up in Germany''s defence budget after years of underspending will be a key driver. The NATO summit in June could help clarify where these billions will go. Our new work discusses potential timelines, allocation and win-rates, adding more granularity in a bottom-up approach. Rheinmetall (+) is our top pick with a further 35% blue-sky upside. But after the rally, we lower our ratings for RENK (= from +) and Hensoldt (- from =).