Almonty Industries – Milestone Reached
Just a few days ago, Almonty shares hit a new all-time high of around USD 22. During the current period of market volatility, the shares fell sharply but are now rebounding. Most recently, Bank of America analysts raised their price target to USD 20.
The company recently reached an important milestone, which apparently prompted some profit-taking. Almonty announced that Phase 1 of its flagship Sangdong mine in South Korea has now reached full production capacity. The mine is now processing 640,000 metric tons of tungsten ore annually, yielding approximately 2,300 metric tons of tungsten concentrate. The sharply increased prices play significantly in the company’s favor. Currently, around USD 2,250 per metric ton unit (MTU) is being quoted. This corresponds to a price of roughly USD 225,000 per ton, implying enormous margin potential, as Sangdong was designed to operate profitably even in a low-price environment of USD 250 to USD 300 per MTU.
Even more exciting and lucrative for shareholders will be the second phase of expansion, which, if all goes well, could be completed by the end of 2027. Production volume will then increase significantly once again, and Almonty will be able to cover 40% of global demand outside of China. According to CEO Lewis Black, this will enable Almonty to establish a fully integrated value chain for critical raw materials in South Korea, which would make the Asian country a global hub for the production, refining, and processing of tungsten. As a result, the company is likely to benefit greatly from the high demand from the defense sectors of Western industrialized nations. Due to its unique properties, tungsten is an essential raw material for several industries, particularly the defense sector.
A few months ago, the US government announced plans to establish a strategic reserve for rare earths and other critical raw materials to support the national technology industry. Governments and states are thus increasingly establishing themselves as an important investor group willing to pay strategically motivated prices to ensure supply security.
Rheinmetall – Berenberg Price Target: EUR 2,100
Defense and drone IPOs are on the rise on the stock market. Defense supplier Vincorion is about to make its debut on the Frankfurt Stock Exchange. With an offering price of EUR 17, its market capitalization stands at around EUR 850 million. Vincorion manufactures mechatronics, generators, and other energy solutions. Vincorion’s components are used in air defense systems and tanks, among other applications. Its customers include Rheinmetall and KNDS. The defense group KNDS also plans to go public this year, as CEO Jean-Paul Alary recently confirmed.
Market leader Rheinmetall currently has a market capitalization of more than EUR 70 billion. Analysts at the private bank Berenberg recently reaffirmed their “Buy” rating and price target of EUR 2,100. Shares are currently trading at around EUR 1,550. Last year, the group generated revenue of just under EUR 10 billion. The company has projected revenues of around EUR 50 billion by 2030. To focus entirely on its core defense business, Rheinmetall has decided to divest its civilian business divisions. The separation will be completed in the current fiscal year. In addition, the group is actively engaged in M&A and is thus expanding into other fields such as naval, aerospace, and drones. The shares remain a core investment in the sector.
RENK – Strategically Well-Positioned
Even though defense stocks have been volatile in recent months, the current geopolitical situation clearly favors industry players. Defense budgets will continue to rise and lead to high profits. The stock market already priced in much of this last year, though a broad consolidation of defense stocks began in the fall. RENK is no exception. From highs of EUR 90, the stock has since fallen back to EUR 54. On average, analysts assign RENK an upside potential of around 20% over the next 12 months. Experts at Bank of America are significantly more optimistic, with a price target of EUR 75.
On the stock market, the company is valued at approximately 3.8x and 3.2x the revenue expected for 2026 and 2027, respectively. Given the German company’s strong market position, this is a reasonable level. RENK specializes in high-precision drive technology and transmission systems and is one of the most important suppliers in safety-critical industries.
The current consolidation at Almonty offers a prime opportunity to invest or add to positions. Its market position as the world’s largest tungsten producer outside of China gives the company geopolitical clout. Analysts recommend buying. Defense stocks such as Rheinmetall and RENK are also beneficiaries of a changing world.
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