Almonty Makes History! Will BASF Bid More for Evonik? Is tonies a Buy?

Almonty: Earnings per share set to rise to USD 2.76 

In the short term, the stock market is not always rational. An example of this is the current situation at Almonty. While the share price has halved over the past six months, the tungsten producer is making operational history. Almonty CEO Lewis Black sounds optimistic in his latest letter to shareholders. For the first time in more than 30 years, a tungsten shipment from the Sangdong mine in South Korea was dispatched to a customer this past weekend. Once the mine is operating continuously, around 200 tonnes of tungsten are to be produced and shipped each month. At the same time, Black sees fundamental changes in the tungsten market: the Chicago Mercantile Exchange (CME) plans to introduce a tungsten futures contract in 2027. S&P Global Platts is also working on its own price assessment for tungsten produced outside China. This could allow the West to become increasingly independent of China in price formation. Futures contracts would enable producers and buyers to hedge prices over the long term. Tungsten prices have recently stabilised at a high level. As China continues to export hardly any tungsten intermediate products, supply remains tight. On the spot market, record prices of almost USD 3,000 per MTU continue to be achieved for material that is actually available.

In addition to tungsten production, Almonty is working on developing another mineral deposit at Sangdong. Around 90 m below the tungsten deposit lies a molybdenum deposit whose historical resource data are currently being confirmed by new drilling. According to Black, the results so far largely align with expectations. As development can proceed from the tungsten mine's existing underground facilities, the company expects comparatively low development costs. Annual molybdenum production of around 5,000 tonnes is planned. The company has already secured an offtaker under contract for the mine's entire planned life. The agreement provides for a minimum price with no price ceiling. This could make the molybdenum project an additional earnings contributor for Almonty.

Bank of America also sees the current share price weakness as a buying opportunity. Following Almonty's Capital Markets Day in New York, the analysts reaffirmed their Buy recommendation for the shares. The experts see the tungsten producer on a strong growth trajectory and consider the recent share price weakness fundamentally unjustified. By 2029, annual tungsten production is expected to increase more than ninefold from 2025 levels, reaching around 5,600 tonnes. The Sangdong mine in South Korea is a key driver of this growth. Projects in Spain and Rwanda, along with establishing tungsten oxide production to improve margins, offer additional potential. The analysts expect free cash flow to rise from USD 138 million in 2026 to USD 728 million in 2027. The analysts believe Almonty can achieve a sharp rise in earnings per share from USD 0.69 in the current year to USD 2.76 in 2027 and USD 3.00 in 2028. The shares are currently trading below USD 10 and therefore do not appear expensive.

BASF: Shares not a buy

While Almonty shares are recommended as a Buy, BASF is only a Hold for mwb research. Although the analysts view a potential takeover of Evonik by BASF increasingly positively, they remain sceptical about the long-term economic benefits. BASF CEO Markus Kamieth recently elaborated on the strategic reasons for a merger. In particular, BASF's integrated production network, known as the Verbund, could generate significant synergies. Evonik could source certain intermediate products more cheaply and reliably within the group. The analysts see further potential savings in procurement, infrastructure and research. However, neither specific synergy targets nor the expected integration costs have been disclosed so far.

The analysts see high production costs in Europe as a significant risk. The takeover could even increase BASF's dependence on European sites rather than sustainably improve its international competitiveness. In addition, existing employment guarantees through 2032 limit the scope for restructuring. The possible takeover of the chemical parks in Marl and Wesseling, which Evonik actually wants to sell, could also entail additional burdens. At the same time, according to media reports, BASF is said to have raised its indicative takeover offer by around 8% from EUR 22.15 to EUR 24 per Evonik share. This would equate to an equity valuation of around EUR 11.2 billion. No official confirmation has been made so far.

In mwb research's view, the final purchase price and financing are crucial to the transaction's success. A predominantly cash-financed takeover could hamper BASF's planned debt reduction and limit its financial scope for future distributions to shareholders. Analysts view Kamieth's statement that BASF would not pursue a takeover at any price positively. mwb research therefore reaffirms its Hold rating with a price target of EUR 55. BASF shares are currently trading at around EUR 52.

tonies: Analysts optimistic

tonies' share price has risen by around 20% over the past two weeks. The shares are now trading above EUR 14, at an all-time high. Expectations for the upcoming quarterly results are rising along with the rally. NuWays analysts expect tonies to impress with strong growth. The analysts therefore recommend Buy and put the fair value of the shares at EUR 18.50. 

For the third quarter, they expect revenue to rise 20% to EUR 174 million. The slowdown compared with the second quarter (+48 %) was mainly attributable to the strong prior-year period, in which the Toniebox 2 was launched. tonies figurines are now likely to be the most important growth driver. Analysts expect revenue to rise 26% to EUR 125 million. New Pokémon and Bluey figurines in particular are driving demand. For Tonieboxes, by contrast, analysts forecast growth of only 6% to EUR 43 million. Regionally, North America is likely to perform particularly strongly again, with revenue growth of 31% to EUR 71 million. By contrast, analysts expect growth in the DACH region of just 6% to EUR 65 million due to the base effect. 

The analysts consider tonies' full-year guidance readily achievable. After nine months, revenue is likely to be around EUR 417 million. To reach the full-year target of more than EUR 760 million, the company would need only 11% growth in the key Christmas quarter. NuWays even expects full-year revenue of EUR 793 million. The broad market launch of the cheaper Toniebox Lite and Christmas trading with new figurines promise tailwinds. Operating profitability is also likely to rise significantly in the fourth quarter, as high-margin tonie figurines account for a larger share of revenue. The analysts therefore consider the adjusted EBITDA margin forecast of 9% to 11% for 2026 realistic. In addition, the reduction of previously accumulated inventories should improve cash flow and enable positive free cash flow for the full year.

Conclusion

Almonty continues on its operational path. The ramp-up of production in Sangdong is likely to drive revenue and profit higher through 2028. The tungsten producer is also working on further share price catalysts. If Bank of America proves right and earnings per share reach USD 2.76 next year, the shares are currently a bargain. BASF is certainly no bargain and has numerous structural problems. These are unlikely to diminish with the acquisition of Evonik. tonies has developed into a very successful niche player.