100% price opportunity or short attack? Deutz, Bayer, Power Metallic Mines

Power Metallic Mines: Strong drilling results point to rising share price

In 2024, the Company caused a sensation with its Power Nickel project. Spectacular drilling results had turned the NISK project in Canada into a world-class multi-metal project. Not only were large quantities of nickel and copper discovered, but also platinum, gold, and silver. This led to the renaming of the Company as Power Metallic Mines. The net present value is already estimated by experts at around CAD 1.15 billion – while the market capitalization is currently below CAD 230 million – and the Company intends to increase it further. The entire area has not yet been explored by far. Even before the recent price correction, Power Metallic had raised around CAD 50 million through a capital increase to expand its drilling program and is fully financed until the end of 2026. This should result in a lot of news flow in the current year, and the chances are good that the stock will continue to cause a stir again in 2025.

Three drills are currently in use. The expansion is currently underway, including a complete renewal of the core logging system. From June, the Company plans to search for new resources with six drills. The Company is very confident about this. Although huge deposits have already been discovered, the Company is confident that the 2025/2026 exploration campaigns will lead to further discoveries. Power Metallic will continue to use the "Ambient Noise Tomography" method. This significantly increases the accuracy of drilling and makes it possible to efficiently develop sulfide deposits.

The latest drill results are also promising. Drill hole PN-24-093 returned 0.13 g/t gold, 2.74 g/t silver, 0.37% copper, 1.16 g/t palladium, 0.18 g/t platinum, and 0.09% nickel. Hole PN-24-086 returned a sensational 65.09 g/t palladium over a 1.55 m interval. Drill hole PN-24-094 also provided the first evidence of massive nickel-copper sulphides in the "Tiger" zone. If the positive drilling results continue, the price should soon move back towards its all-time high of around CAD 1.9 – 50% above its current level.

Deutz: 70% upside or short attack?

Last week, it finally hit the Deutz stock. Within 14 days, it lost around 23% of its value – the bulk of it at the end of last week. On Friday, Deutz shares entered the weekend at EUR 5.81. Does this mean that the "healthy" consolidation is now over? After all, the stock is still trading around 40% above its level at the beginning of the year.

Warburg Research believes that the Deutz share is undervalued at its current level. The analysts recommend buying the share and now see upside potential again. In their update on the occasion of the annual figures, they had raised the price target for the Deutz share from EUR 7.60 to EUR 11.80.

But caution is advised. Because as with several other profiteers of the German government's billion-euro package, short sellers are also building positions at Deutz. Most recently, for example, Qube Research & Technologies Limited reported that it holds a short position of 1.74% in Deutz shares.

Bayer: Buy recommendation despite ongoing glyphosate fiasco

Bayer currently has bigger problems than tariff uncertainty. The Leverkusen-based company urgently needs new blockbusters to replace the declining sales of its top sellers, Xarelto (anticoagulant) and Eylea. But time and money are in short supply. And the never-ending legal battles in the US – particularly over glyphosate – continue to overshadow everything and tie up resources.
Recently, Bayer has at least strengthened its oncology pipeline. It has acquired the exclusive worldwide license for an MTA-compatible PRMT5 inhibitor from Puhe BioPharma for the selective treatment of MTAP-deleted tumors. However, the project is only in a Phase 1 study, and it will be a long time before a possible market approval.

Puhe BioPharma CEO Yongqi Guo commented: "We see great potential for MTA-cooperative PRMT5 inhibitors in the treatment of MTAP-deleted tumors. Our MTA-cooperative PRMT5 inhibitor PH020, now known as BAY 3713372, has shown competitive selectivity for MTA-bound PRMT5, as well as activity and brain penetration in preclinical studies."

At least there was a positive analyst comment recently. DZ Bank, for example, confirmed its "Buy" recommendation for Bayer shares. Even though the US Supreme Court is not expected to rule on glyphosate until the end of 2026, investors should take advantage of the historically low level. DZ analysts see Bayer's shares as being worth EUR 30. The stock is currently trading at around EUR 20.

Buying Bayer shares does not seem compelling right now. An end to the litigation is still not in sight and the pharmaceutical pipeline is anything but promising. In contrast, the Power Metallic Mines share offers an interesting entry point after the recent price decline. If the positive news flow continues, significantly higher prices should be possible. At Deutz, the rally appears to be over for now.