FRANKFURT (dpa-AFX) - Optimistic comments by Rheinmetall's CEO on the share price potential and the upgrade of Hensoldt shares by analysts Kepler Cheuvreux spread good sentiment in the German defense sector on Monday.

In the firm German benchmark index Dax, the shares of the arms company and automotive supplier Rheinmetall gained 2.7 percent to 247.10 euros, thus also overcoming the 21-day average line again. It signals the short-term trend to investors interested in chart technology.

In addition, the shares of engine manufacturer MTU rose by 2.2 percent to 230.10 euros and those of aircraft manufacturer Airbus by 1.4 percent to 130.14 euros. In the mid-cap MDax, Hensoldt rose 4.5 percent to 29.08 euros.

Rheinmetall CEO Armin Papperger told Redaktionsnetzwerk Deutschland in an interview on Saturday that he considers a valuation of 17 billion euros for Rheinmetall realistic in the medium term. Currently, the company is valued at just over 10.5 billion euros on the stock market. "Even if the operating profit figures given by the chief executive are derived from the current targets for fiscal 2025, this should still be positive for the stock," a trader said.

Analyst Aymeric Poulain of Kepler Cheuvreux is also positive on the shares of defense electronics manufacturer Hensoldt and now recommends it as a buy with an unchanged price target of 33 euros. The growth stock Hensoldt, which is valued on fundamental grounds, is now almost 25 percent below its record high and has lost half of the gains from its previous upward movement, he said, explaining his review of the investment assessment.

At the same time, Kepler Cheuvreux said that there had been no fundamental change in its previous assessment of Hensoldt. Moreover, insinuations in an article in the weekly magazine "Spiegel" had not provided any evidence of bad practices by German defense companies and suppliers and should not shake Germany's "historic turnaround" with regard to defense spending. "Defense spending of around 60 billion euros is planned for 2024, 20 percent more than in 2021, and much more is to come if Germany is to achieve military spending of two percent of gross domestic product in line with its NATO commitments."

Jürgen Molnar, capital markets strategist at trading house RoboMarkets, also reminded investors, in keeping with the rise in share prices, that the day marks the start of "the largest air force exercise in the history of the Federal Republic." With the manover "Air Defender 2023", NATO is practicing for possible war scenarios. Everything in the air force's repertoire will be trained, from troop deployment and air refueling to interception exercises. "Of course, NATO also wants to send out a signal in view of the current scenario in Ukraine.