900% price increase and only a P/E ratio of 10! Rheinmetall, Hensoldt, and Almonty Industries in focus

Almonty Industries: P/E ratio for 2027 below 10

On Tuesday, it briefly looked as if the record run of Almonty shares had come to an end for the time being. The share price slumped by over 15%. After rising more than 100% since the beginning of the year, profit-taking would be entirely understandable. However, investors quickly used the dip to buy the stock. Yesterday, the share price on the Nasdaq was back above USD 20.

And if Cantor Fitzgerald is to be believed, the record chase is not over yet. On Wednesday, the analysts published their updated study on the tungsten producer. Their price target is USD 25.80 or CAD 36.00. This represents an increase of more than 50% in their price target. On the one hand, they point to the rising price of tungsten, which has more than doubled since the beginning of the year. The metric ton unit (mtu) of this rare raw material now sells for over USD 1,800 on the Rotterdam trading platform. A year ago, the price was well below USD 400. The war in the Middle East is likely to further drive up military spending and thus the price of tungsten. This is because the extremely hard metal is in short supply and is needed in the defense industry for rockets and ammunition, among other things.

Analysts believe that Almonty is well on its way to becoming the largest non-Chinese tungsten supplier to Western markets. Annual production is expected to increase from around 58,000 mtu/year to 800,000 mtu by 2028. The expansion of the mine in Portugal, the ramp-up of the mine in South Korea, which is probably the most efficient in the world, and the development of the US mine in Montana are expected to contribute to this.

Rising production, coupled with high prices, naturally has a massive impact on Almonty's revenue and profit development. Cantor Fitzgerald expects the tungsten group's revenue to increase more than tenfold to CAD 472.3 million in the current year. In 2027, revenue is expected to reach CAD 1.2 billion. Analysts estimate earnings per share in 2026 at CAD 1.16. Next year, this figure is expected to rise to CAD 3.21. Despite the rally in the current year, the current price of CAD 27.56 still does not appear to be high. This puts the P/E ratio for 2027 below 10. Cantor Fitzgerald therefore considers Almonty shares a "Buy".

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Rheinmetall: "affordable defense" against drones

It is alarming how air defense in the Middle East is reaching its limits with inexpensive drones – even though the war in Ukraine has been teaching us for years that mass and cost logic are decisive. When cheap drones are fought with expensive interceptor missiles, it is not necessarily the better technology that wins in the end. In Qatar, Dubai, Saudi Arabia, and elsewhere, it seems as if they are using a sledgehammer to crack a nut. There were even reports yesterday suggesting that the US is running low on interceptor missiles. No wonder, since Iran's drone production capacity exceeds that of missile manufacturers in the US many times over. That is why the US Air Force is desperately trying to destroy the factories in Iran. It remains to be seen whether the plan will work.

The demand for "affordable air defense" is therefore set to explode. And this is precisely what Rheinmetall offers. The mobile Skyranger and the stationary Skyguard are designed for the innermost layer of air defense, meaning the zone where drones are intercepted before they hit infrastructure or troops. Skyranger is a mobile solution designed for high rate of fire, precise target engagement, and programmable airburst ammunition. Depending on the caliber, Rheinmetall cites effective ranges of up to 3 km (30 mm) or 4 km (35 mm) and explicitly sees the system as suitable for counter-UAS and close-range air defense. Skyguard is the stationary variant for protecting critical infrastructure. Rheinmetall positions the system as part of a layered air defense system and emphasizes its ability to engage small and fast-moving targets. In practice, this means that Skyguard can neutralize drones at high frequency and at significantly lower unit costs. This is exactly the kind of "economical defense" that is so urgently needed at present.

Rheinmetall shares have not been able to benefit from this so far this week. By Thursday evening, they had lost almost 6% of their value in the four trading days and were trading at around the same level as at the beginning of the year.

Hensoldt: Stock market wants to see growth

Hensoldt shares are also currently lackluster. The figures for 2025 published at the end of February were noted by the stock market, but nothing more. Order intake rose by 62% to EUR 4.7 billion in the previous year. This brought the order backlog at the turn of the year to EUR 8.8 billion (December 31, 2024: EUR 6.6 billion). However, the stock market seems to be losing patience with defense companies. What counts is revenue and profit growth. And this continues to be rather sluggish. Hensoldt increased its revenue in 2025 by just under 10% to EUR 2.455 billion. Adjusted EBITDA rose from EUR 405 million to EUR 452 million. That is hardly the kind of growth investors associate with a defense supercycle.

Yesterday's announcement of a takeover also failed to boost Hensoldt's share price. According to the announcement, an agreement has been signed to acquire Dutch optronics specialist Nedinsco. Nedinsco was founded in 1921, has locations in Venlo and Eindhoven, and employs around 140 people. The company develops and manufactures electro-optical sensor systems such as periscopes, driver vision systems, and subsystems for optronic sensor units. This will enable Hensoldt to strengthen its technological capabilities in a strategically relevant segment, secure critical supply chains, and expand its presence in Europe. The acquisition will be financed entirely from existing funds. The purchase price was not disclosed.

Even after a 900% rally over the past 12 months, Almonty shares may not yet be overpriced. The projected P/E ratio of below 10 for 2027 is one reason why analysts continue to recommend the stock as a "Buy". In contrast, German defense stocks currently appear to be running out of momentum. Rheinmetall and Hensoldt will likely need to deliver stronger revenue and earnings growth to reignite investor enthusiasm. Without that, the investment case becomes less compelling.