Almonty Industries: On the Path to Becoming a Tungsten Giant
At the beginning of the chain is Almonty Industries. The US investment bank Stifel added the stock to its watchlist on September 24 with a “Buy” rating. The price target is USD 25. At the current price of USD 13.40 (EUR 11.60), that represents a premium of more than 80%. While Goldman Sachs rates the stock only as “Neutral” at current levels, DA Davidson, in a July report, even sees the stock reaching USD 33. That would be well more than a doubling of the price. Almonty’s business model is based on one of today’s most in-demand strategic commodities: tungsten. It has the highest melting point of any metal and is extremely hard. Without tungsten, there would be no carbide tools, no armour-piercing ammunition, and no heat-resistant engine parts. According to Stifel, demand from the defense sector has been growing by just under 14% per year since 2020—faster than in any other sector. About 80% of global tungsten production comes from China. Since Beijing drastically restricted exports in early 2025, the price of the intermediate product ammonium paratungstate (APT) has risen by about 775%. In Europe, 1 metric ton unit (equivalent to 10 kg of tungsten trioxide) currently costs around USD 3,000.
Starting January 1, 2027, the US Department of Defense will also tighten its regulations. Tungsten from mines in China, Russia, Iran, or North Korea will then be prohibited in defense contracts, regardless of where it was further processed. Other producing countries are also tightening restrictions. Zimbabwe banned tungsten ore exports in July, and in Vietnam, the world’s second-largest producer, a similar proposal is on the table. The Panasqueira Mine in Portugal has been part of Almonty’s portfolio for years. However, the centrepiece is Sangdong in South Korea, which may become the Western world’s most important tungsten mine. In the first phase of development, the mine is expected to deliver approximately 230,000 MTU of concentrate per year; in Phase II, starting in 2027, the volume is expected to roughly double. More than 90% of Phase I production has been sold under a 21-year offtake agreement with a minimum price but no price cap. Stifel sees Almonty as the leading tungsten producer in the West by the end of 2028. For 2027, analysts expect revenue of CAD 926 million, up from CAD 33 million in 2025. The price target is based on 13 times the operating earnings before interest, taxes, depreciation, and amortization (EBITDA) expected for 2027. In addition, the company plans to build its own tungsten oxide plant in Korea so more value stays within the company.
However, some patience is required. Although ore has been flowing through the processing plant in Sangdong since June, the company did not receive final regulatory approval for commercial operations until September 17. “Sangdong now has approval to operate the processing plant commercially and to sell what it produces,” explains CEO Lewis Black. There is always a lag of several months between production and sale. As in the second quarter, revenue from Korea is therefore unlikely to be reflected significantly in the third-quarter report. The 498% jump in revenue to CAD 43.0 million in the second quarter was primarily due to high prices; however, the sales consisted almost exclusively of tungsten from the Portuguese operation. Nevertheless, CEO Black refers to this as a “first glimpse of future profitability.” Investors seeking first-hand information can do so on Wednesday, October 7. At 4:00 pm German time, Black will be a guest at the 20th International Investment Forum (IIF), one of the most important virtual investor events, which is also open to retail investors. Register below.
https://us06web.zoom.us/webinar/register/WN_KxUBth5WSYagM_MwU_P4fw#/registration
Starting in the fourth quarter, Sangdong will also be reflected in the financial results. At the same time, production at the Gentung project near Dillon, Montana, is scheduled to begin at year-end; the company also relocated its headquarters there in April. Since then, Almonty is no longer considered a Canadian company but rather a US company, which greatly facilitates business dealings with the US defense industry. In addition to Gentung, Sangdong and Panasqueira, Almonty owns other potential mining areas in Spain; the company has also entered into a partnership with the Rwandan government, enabling it to purchase tungsten from local small-scale producers to secure its supply. This is also expected to generate cash flow after a short ramp-up phase. The financial development of the new sites is secured. Following the successful placement of a senior notes offering worth USD 800 million, Almonty has sufficient cash on hand to drive forward the planned projects and even repurchase its own shares. All of this is currently available at a bargain price. Based on 2027 estimates, the price-to-earnings (P/E) ratio is just under 10.
Renk: Share Price Halved Despite Record-High Order Backlog
A glance at the battlefield reveals what tungsten is used for: projectiles, armour and missiles. The heavy vehicles operating there, in turn, require transmissions. These are supplied by the Augsburg-based specialist Renk Group. Goldman Sachs was initially just as strict here as it was with Almonty, but upgraded the stock from “Neutral” to “Buy” on September 18. The price target: EUR 65. Analyst Sam Burgess argues that the recent setback offers an attractive entry opportunity. Berenberg goes further, setting a target of EUR 72. Based on the current price of EUR 39.91, the upside potential is therefore between 60% and 80%. Renk produces drive systems for tracked vehicles and ships, such as the transmissions for the Leopard 2 main battle tank and the Puma infantry fighting vehicle. It also manufactures slide bearings, couplings and marine propulsion systems. The spare parts and maintenance business, known in industry jargon as “after-sales”, is particularly lucrative. Tank transmissions remain in service for decades and require regular overhauls. This segment is expected to generate EUR 1 billion in revenue by 2030 and double that amount by 2035.
The order book is excellent. In the first half of the year, order intake rose by just under 30% to EUR 1.2 billion. The order backlog climbed to a record high of EUR 7.4 billion. That is nearly five times the annual revenue of more than EUR 1.5 billion expected for 2026. “With just under EUR 1.2 billion in order intake, we have already reached nearly the same level as the first nine months of last year after just six months,” emphasizes CEO Alexander Sagel. Added to this is a contract from the US Army worth up to USD 691 million and the acquisition of David Brown Defence, which is expected to open doors to the United Kingdom, Canada and Australia. Furthermore, on September 21, Italy launched a procurement process for new main battle tanks worth more than EUR 5 billion. Renk is among the established suppliers for powertrains and chassis in such programs.
According to analysts, the entry opportunity arises from the share price slump following the half-year results. Despite the high order backlog, stock market investors found a sticking point: Revenue grew by only 2.7% to EUR 637 million in the first six months, while adjusted earnings before interest and taxes (EBIT) rose by 10% to EUR 98 million. Expanding production capacity from fewer than 600 gearboxes in 2023 to a target of 2,000 by 2030 will initially cost money. The next key milestones are the third-quarter results, which are expected to be released on November 5, and a strategy presentation on December 8. With an estimated 2027 P/E ratio between 18 and 19, Renk shares are valued far higher than Almonty’s.
OHB: Satellites for Greater Security in Europe
Even the most modern tank brigade cannot see much without satellites. Reconnaissance, secure communications and navigation have long been conducted via space. That is exactly where OHB is at home. Following a roadshow with the CFO on September 25, Deutsche Bank raised its price target from EUR 275 to 300. Analyst Sriram Krishnan points to the company’s growth momentum and order potential, which he believes the market is underestimating. At the current price of EUR 183.80, this would represent a premium of 63%. At the same time, Berenberg confirmed its target of EUR 358 and ranks OHB, along with Renk, among the industry’s favourites. Rothschild & Co Redburn has the highest target at EUR 360.
The business model of the Bremen-based company is primarily based on the construction of satellites, such as those for the European navigation system Galileo and for Earth observation. It also manufactures components for launch vehicles and aircraft. Through its subsidiary Rocket Factory Augsburg, the group is also involved in the development of its own rockets. In the medium term, management is targeting total revenue of more than EUR 4 billion, up from approximately EUR 1.4 billion in the current year. Operations are running smoothly. In the first half of the year, total revenue rose by 11% to EUR 627.9 million, while adjusted EBIT increased by 46% to EUR 38.9 million. The order backlog also reached a record high of EUR 3.3 billion. At the end of August, an order from satellite operator SES worth just under EUR 1 billion was added. It comprises 18 satellite platforms for the European communications network IRIS², with the first ones scheduled to launch in 2029. On September 24, the Swedish subsidiary also signed a memorandum of understanding with the defense contractor Saab. The focus is on satellites for situational awareness, secure communications and early warning. “Space is now a key prerequisite for security, defense and resilience in Europe,” says CEO Marco Fuchs.
The share price tells a different story. In the wake of SpaceX’s IPO, the stock surged to as high as EUR 685 in May. It then fell by more than 70%. A placement of new and existing shares at EUR 300 in June, as well as the delayed maiden flight of Rocket Factory’s three-stage launch vehicle RFA One, weighed further on the stock. OHB has been listed on the TecDAX again since September 21, which increases its visibility among institutional investors. Deutsche Bank’s new price target corresponds exactly to the placement price from June. This level was still being paid just recently, so it is not merely wishful thinking. However, with a forward P/E of around 35, OHB is also the most expensive of the three stocks.
Political Tailwinds Fuel Analysts’ Optimism
Three companies, one chain. It all starts with Almonty and its tungsten, without which neither modern ammunition nor armour steel can function. Next come the vehicles powered by Renk transmissions. At the top are OHB’s satellites, which provide situational awareness and secure communications. The political tailwind is the same across the board: rising budgets for defense and space, and the desire for supply chains within one’s own sphere of influence. All three stocks have also corrected sharply, even as their operating figures remain solid. Analysts’ price targets are ambitious, though they are by no means a guarantee. They do, however, illustrate the current disconnect between market sentiment and business performance. Based on valuation, Almonty is particularly attractive for entry with a single-digit P/E ratio, especially since prices below USD 14 are a level from which the stock has repeatedly rebounded toward USD 20.
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