Puma: Shares jump above EUR 25 – will the recovery extend to EUR 29?
Shares in Puma gained more than 5% last week following the quarterly results and peaked at EUR 27.21 before profit-taking set in. Nevertheless, the sporting goods manufacturer continues its recovery, which began in early October. The shares are up 17% since the start of the year and around 44% over 12 months. Investors are apparently betting that the ongoing restructuring is increasingly taking effect.
The financial results provide evidence of this, but also counterarguments. Quarterly revenue fell by 5% year on year to EUR 1.78 billion, or by 6.3% on a currency-adjusted basis. The gross profit margin improved from 45.4% to 49.5%. In addition to lower procurement costs, tariff refunds of EUR 29.8 million also helped. Despite this support, the operating result remained negative at minus EUR 11.4 million. A higher margin alone has therefore not yet been enough to return to operating profit.
The inventory reduction is particularly striking: inventories shrank by 24.3% to EUR 1.61 billion. At the same time, free cash flow swung from minus EUR 43 million to plus EUR 92 million. This eases financing pressures, but is also attributable to lower procurement volumes, lower tax payments and lower capital expenditure. For the full year, Puma now expects an operating loss of EUR 80 to 130 million, compared with EUR 50 to 150 million previously. The guidance range is narrowing; this is not really a clear improvement.
mwb research remains cautious. The research firm reaffirms its Hold recommendation and the price target of EUR 24. It points to progress with the restructuring, but also to weak business in North America and EMEA, as well as high operating costs. The share price is thus already pricing in further improvements. Over the next few quarters, it will therefore be crucial to see whether the inventory reduction leads to stable business performance and whether the improved gross profit margin also feeds through to earnings once the one-off effects subside.
From a technical perspective, the picture has brightened considerably. With the jump above EUR 25, the shares have cleared a crucial reference level and are trading above all moving averages. The closest is the 100-day moving average at around EUR 25.55, followed by the 200-day moving average at EUR 24.83. Further below are the 20-day moving average at EUR 24.14 and the 50-day moving average at EUR 23.60. These areas could serve as potential support levels during pullbacks.
The crucial factor now is a return to the previous trading range, with a lower boundary at approximately EUR 26 to 26.50 and an upper boundary around EUR 29. The shares traded within this range for much of the period between May and August, before the sell-off followed. The latest rise initially takes them back to their lower boundary. If Puma holds its ground there, the upper zone around EUR 29 comes back into focus. However, three trading days in this zone do not yet confirm a breakout. For that, the shares must also defend the reclaimed levels during pullbacks.
Antimony Resources: Canada’s answer to China’s antimony monopoly?
China largely controls the global antimony (stibnite) market. The tightening of already strict export restrictions has severely disrupted global supplies in recent years. However, the supply-critical raw material antimony is indispensable for defence equipment, semiconductors and renewable energy systems, so Western industrialised countries are intensively seeking stable sources of supply in their own or allied countries. Canadian mineral explorer Antimony Resources has used this situation to position itself with its flagship Bald Hill project in the province of New Brunswick.
Aware of the site’s strategic relevance, the regional government supports the company, as it also wants to establish a reliable North American value chain locally. Against this backdrop, the venture is increasingly positioning itself as a potential primary supplier to Western customers. In this context, Almonty Industries, with its focus on the raw material tungsten, could potentially serve as a model for the management team led by Jim Atkinson.
Systematic exploration of the Bald Hill deposit has repeatedly delivered exceptionally high-grade metallurgical findings in recent months. Diamond core drilling in the main zone confirmed massive mineralisation with peak grades of 27.3% antimony over 0.3 m within broader intervals, as well as further intersections of 21.45% over 1.10 m and 15.0% over 0.8 m. The accompanying trenching and drilling programmes in adjacent areas also confirmed visible gold, with grades up to 285 g/t. In parallel, management completed a high-resolution airborne geophysical survey, which demonstrates the structural extension of the mineralised zones beyond the previously known area. These interrelated new datasets suggest an economically viable combination of high base metal grades and value-enhancing precious metal content.
On the capital side, the company secured sufficient liquidity to continue the planned field programmes by completing a tax-advantaged “flow-through” financing of CAD 5.0 million at CAD 0.47 per share. Due to strong demand, this was supplemented by a further placement of CAD 3 million at the market price of CAD 0.30 per share at the end of October. The forthcoming recalculation of the mineral resource estimate in accordance with the national NI 43-101 standard is therefore fully funded.
On October 16, research firm GBC AG issued a Buy rating with a price target of CAD 2.52 and points to parallels with the strategic revaluation of other Western resource companies. Following the wave-like rise and subsequent fall in the share price during the current financial year, the current valuation level of CAD 0.27 (EUR 0.18) offers an attractive risk-reward profile. Should the upcoming resource estimate match the excellent drilling results reported to date, nothing should stand in the way of a revaluation of the assets.
Deutz: Shares below EUR 10 – will the key support zone hold now?
Deutz shares fell around 7% on Friday versus Thursday’s close and continued the downward trend that began on September 10. With the renewed fall below EUR 10 and the break below the October 23 low, the technical picture is deteriorating further. Despite the recent losses, the shares remain up around 12% since the start of the year and about 10% over 12 months.
Notably, the selling pressure coincides with positive analyst comments. MPCM reaffirms its Buy recommendation with a price target of EUR 19. Analyst Stefan Augustin points to the Netherlands’ decision to select two military vehicle platforms from Deutz’s acquisition target FFG: ACSV and Wisent 2. He sees this as confirmation of the anticipated potential. With the agreed EUR 1.6 billion acquisition of FFG, Deutz aims to expand its defence business significantly and develop from an engine manufacturer into a broadly diversified industrial group.
At the same time, an operational risk is coming into focus. According to a report in WirtschaftsWoche, the supply of spare parts from a central Bundeswehr logistics centre is faltering. Around 150 employees at the affected maintenance provider FFG could face short-time working if the flow of parts does not resume within two weeks. According to the report, no official response from FFG to the enquiry had been received. However, there is no evidence that this news triggered the share price slide.
Meanwhile, the latest published financial figures show growth. In the first half, revenue rose by 10.7% to EUR 1.12 billion and order intake by 28.7% to EUR 1.33 billion. Adjusted EBIT rose 43.1% to EUR 79.7 million; the margin improved to 7.1%. However, free cash flow before acquisitions remained negative at minus EUR 29.7 million. Higher inventories tied up funds. Rising profits and actual cash inflows thus followed different paths. The next quarterly figures follow on November 5. Particular attention is then likely to focus on whether Deutz continues to grow and reduces the amount of capital tied up. Until then, the improved half-year result contrasts with a weak share price performance. The stock market evidently demands more than the prospect of additional defence orders.
From a technical perspective, the situation remains tense. The 200-day moving average at around EUR 10.40 is above the share price, as are the 20-, 50- and 150-day moving averages. A convincing signal of a trend reversal is therefore still lacking. The share price has fallen back to a level last reached in August. The support zone between around EUR 8.70 and EUR 9.40 will be crucial. Within this range, the level around EUR 9.30 has already played a role several times. The psychological threshold at EUR 9 also deserves attention. If the range holds, stabilisation would initially be possible. A sustained break, by contrast, could bring the former support zone around EUR 8.50 back into play. For the outlook to brighten, Deutz would first have to reclaim EUR 10 and then overcome the 200-day moving average. Robust stabilisation therefore remains elusive.
Conclusion
Puma is beginning to recover following improved gross margins and a significant reduction in inventories, but must still secure a sustainable operational turnaround after the jump above EUR 25. Antimony Resources is strategically positioning itself as a Western counterweight to China’s antimony monopoly with high-grade drilling discoveries in New Brunswick and fresh capital. Deutz is coming under technical pressure despite strong half-year figures and strategic defence-related upside potential, making the defence of the support zone below EUR 10 the top priority now.
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