Almonty Industries: Analysts raise target price! 75% Upside Potential! CEO clearly backs Rheinmetall and Co. on CNBC

75% price potential: Analysts raise target

GBC Research has raised its price target for Almonty Industries shares from CAD 4.20 (EUR 2.69) to CAD 5.50 (EUR 3.52). The "Buy" recommendation was confirmed in a detailed research update.

The main reason for the price target increase is the improved visibility for the commissioning of the Sangdong mine in South Korea. The mega mine will make Almonty the largest tungsten producer in the Western world. Analysts report that construction work on the Sangdong mine was largely completed in the first quarter. The installation of the processing plant is in its final phase, and the last tranche of the project financing loan from KfW IPEX Bank for USD 75.1 million has been drawn down. The first ore processing is scheduled to take place in the second half of the year.

P/E ratio for 2027 below 5

Revenue and earnings are expected to grow dynamically in the coming years. Analysts already expect revenue to double to around CAD 60 million this year. In 2027, revenue of CAD 314 million is expected to result in net income of CAD 212 million. This would give Almonty a strong net margin of 67.5%. With expected earnings per share of CAD 0.74 for 2027, the P/E ratio is currently below 5. This appears to be too cheap. GBC study available for download here

Almonty of strategic importance for the defense sector

With its resource base, high ore grades, and vertical integration extending to its tungsten oxide processing plant, Sangdong is becoming a strategically significant player in the global tungsten supply chain – and thus for the Western defense sector. This strategic importance was recently confirmed officially at the highest level by the US government. Almonty received an official letter from the US House of Representatives' Select Committee on the Strategic Competition between the United States and China. The Sangdong mine was recognized by the committee for its potential to become the largest tungsten producer outside China.

The committee intends to continue working with Almonty. Almonty could not only support the US defense industry but also potentially supplement national defense stocks with its tungsten. There has been no commercial tungsten production in the US since 2015.

CEO Lewis Black with clear words in CNBC interview

CEO Lewis Black emphasized Almonty's focus on supplying the defense industry in an interview with CNBC last Friday. According to Black, nearly 85% of current production - Almonty already operates a tungsten mine in Portugal - is already going to the defense sector. This focus will be maintained with the opening of the Sangdong mine. Black also explained the relocation of the Company's headquarters from Canada to the US – a move that had already been decided under the Biden administration – by saying that the Company wanted to be closer to its customers.

(link: https://youtu.be/g6pys3NNk44?si=zxQUtZgLcwciC29e

The fact that there is a lower price limit but no upper limit for the latest partnerships and purchase agreements shows that availability is more important to customers than price. The lower limit, in turn, gives Almonty important planning security.

Conclusion: Shares still worth buying

Overall, the lights are green for further price increases for Almonty shares. GBC Research's forecasts show that the stock is anything but expensive, even after tripling since the beginning of the year. This is also true when compared to companies like Rheinmetall, Germany's largest defense manufacturer, which, for example, requires tungsten for hardening ammunition, or the US raw materials company MP Materials. The comparison with MP Materials will likely come into sharper focus with the upcoming NASDAQ listing. By then at the latest, the share price should be heading towards GBC's price target. An entry at the current level appears to offer significant upside potential.