Almonty Industries, Rheinmetall, Lockheed Martin – Tungsten, Defence and a Share Price Decline That Could Open Up Opportunities

Almonty Industries: Tungsten Production at Sangdong Gets Underway

On September 21, the Sangdong processing plant received its final operating certificates, which had been issued on September 17. This officially cleared Phase I for commercial operations. Two days later, Almonty Industries announced the site's first tungsten production since 1993, a 33-year milestone. In a shareholder letter dated September 29, the company reported that Phase II was progressing. The expansion is expected to be completed as early as 2027 and is set to raise capacity to up to 1.2 million tonnes of ore per year, with annual output of around 460,000 MTU. The mill initially operated 13 hours a day, but according to CEO Lewis Black at the International Investment Forum, that has since increased to 16 hours.

In parallel, Almonty is expanding its raw material sources. On September 14, the company signed a binding agreement with the government of Rwanda, which will receive a 25% stake in Almonty Rwanda, while Almonty retains 75%. The government is contributing the 32 km² Shyorongi exploration concession and a processing licence. On September 17, this was followed by a supply agreement with Wolfram Bergbau und Hütten AG, a subsidiary of the Sandvik Group, for concentrate from the tailings of the Spanish Los Santos mine, with an offtake commitment for at least approximately 1,720 tonnes of contained tungsten trioxide. From January 1 2027, US restrictions on tungsten from China, Russia, North Korea and Iran will also apply.

On the stock market, the shares remain under pressure despite the positive news. On October 9, they closed at USD 11.87 on NASDAQ, down 32.71% from USD 17.64 on September 1. By the end of September, Almonty had repurchased 2,914,739 shares for around USD 48 million. Jefferies initiated coverage on September 2 with a Buy rating and a price target of USD 26.25, followed by Stifel on September 24 with USD 25.00. On September 18, DA Davidson reaffirmed its Buy recommendation with a target of USD 33.00. Goldman Sachs is more critical, setting its price target at USD 13.00, as it expects tungsten prices to fall and a slower ramp-up in Sangdong. If the ramp-up succeeds, it could boost the shares. According to the CEO, the vessel for the first shipment of the tungsten concentrate produced is booked for October 24.

Rheinmetall: Ammunition, Satellites and More Room to Grow

Rheinmetall's products remain in demand. On September 14, the Düsseldorf-based group announced an order for several tens of thousands of 155 mm artillery shells for an international customer. The value is in the low hundreds of millions of euros, production is under way, and completion is planned for 2027. According to the announcement, the order was booked in the third quarter of 2026. On September 30, this was followed by an order from the US Army for MK93 mounts worth USD 20.7 million, comprising 3,104 new mounts and upgrades to 245 existing ones. Delivery is scheduled for completion by October 2027.

The business is also gaining momentum beyond ammunition. On October 6, the group announced that the Bundeswehr will receive exclusive access to radar satellites through its subsidiary Rheinmetall ICEYE Space Solutions. Production in Neuss has started, with plans for several dozen satellites per year. The first satellite had already been launched into orbit jointly with Argotec on October 2. On October 8, Rheinmetall doubled its syndicated credit facility ahead of schedule from EUR 750 million to EUR 1.5 billion. According to media reports, the group also reaffirmed its targets for 2026 on October 5.

That is not enough for the stock market. On October 9, shares ended Xetra trading at EUR 939.10, down from EUR 1,079.80 on September 1, a 13.03% decline. Analysts' price targets nevertheless remain above that level. Deutsche Bank reaffirmed a price target of EUR 1,800.00 on October 6, while RBC cited EUR 1,600.00 on October 9 and also recommended buying. Bernstein lowered its target to EUR 1,200.00 on the same day, while Berenberg downgraded the shares to Hold due to uncertain prospects beyond 2030, with a target of EUR 1,020.00. If the deadlock over the Arminius tank procurement programme is broken by the end of 2026, as media reports suggest, the pullback could prove to be a buying opportunity. If the contract fails to materialise, that tailwind will be absent.

Lockheed Martin: Missiles in Demand, Dividend Increased

Demand for missiles is high, and Lockheed Martin is delivering. On September 21, the US defence group announced an Army framework contract worth up to USD 1.2 billion for the PrSM Increment 2 precision missile. A second flight test in August had demonstrated that it can hit moving maritime targets. Lockheed intends to quadruple production. On October 9, the group unveiled PAC-3 Edge, a new interceptor missile for an Army programme. Testing begins in 2027, with operational readiness planned by 2031. Lockheed invested USD 250 million in the Strigo Product Center.

Shareholders also benefit. On October 9, the board of directors increased the fourth-quarter dividend to USD 3.60 per share, up USD 0.15 from the previous quarter. The record date is December 1, with payment on December 31. Meanwhile, the group is growing through acquisitions. On July 6, Lockheed agreed to acquire Ultra Maritime for USD 3.45 billion. The underwater warfare specialist is set to join the Rotary and Mission Systems division following completion. According to the second-quarter figures, the order backlog stood at USD 230.4 billion as at June 28.

Yet the shares are declining. On October 9, they closed at USD 509.59, compared with USD 544.50 on September 1, a decline of 6.41%. They are 16.28% below the high of USD 608.68 reached on August 14. Rothschild & Co Redburn sets the price target at USD 650.00 and recommends buying, while Barclays is more cautious and sets the target at USD 554.00. TD Cowen lowered its price target on October 9 from USD 600 to USD 570 and maintained its Hold rating. On October 22, the group will present its third-quarter results. If Lockheed confirms its guidance, this could give the shares a boost.

Conclusion

Tungsten and defence are in high demand, yet the stocks are under pressure. Almonty Industries is ramping up its Sangdong mine, Phase II is progressing, and additional sources in Rwanda and Spain are expanding its supply base. If the Sangdong ramp-up succeeds, the recent pullback may have been excessive. Rheinmetall supplies ammunition and satellites and has greater financial flexibility, even as Bernstein and Berenberg have lowered their price targets. Lockheed Martin is increasing its dividend and focusing on missile systems, with its next earnings report due on October 22. Demand is there, but the stock market is still hesitant.