Between Defence Stocks and the Gold Rush: Rheinmetall, Hensoldt and Lahontan Gold Could Become Profit Machines

Rheinmetall: Massive Defence Boom Drives Share Price Higher

The latest surge in Rheinmetall's share price has caused a stir in trading and catapulted the stock back above the psychologically important EUR 1,000 mark to EUR 1,090. Investors are celebrating this impressive recovery, while geopolitical tensions are supporting the sector as a whole. Growing doubts about external security umbrellas are driving the momentum and putting European defence groups in the strategic spotlight.

Operationally, the Düsseldorf-based defence group is backed by hard facts and a massive capacity expansion. With a market capitalisation of just under EUR 50 billion and a P/E ratio of around 100, the valuation is admittedly ambitious, but is underpinned by strategic acquisitions and facilities such as the new ammunition plant in Albacete. The company invested around EUR 20 million there to produce 1.2 million shells annually. In addition, it doubled the credit line to EUR 1.5 billion to support its rapid growth.

Over the coming weeks, all eyes will be on November 5, 2026, when it will present its third-quarter figures. The investment thesis rests on long-term major projects such as the Arminius initiative and the goal of lifting revenue to EUR 50 billion by 2030. Opportunities for sustained growth are counterbalanced by risks such as lengthy approval procedures and political budget debates.

From a technical perspective, the share price can now advance further to EUR 1,200 or even EUR 1,300. There it will encounter stronger resistance, whether horizontal lines or moving averages, such as the 200-day SMA. If it overcomes this area, there will be room for further gains to EUR 1,600. However, if the price falls back below EUR 1,000, this would be a clear sign of weakness and could also allow another test of the most recent low.

Hensoldt: Record Order Backlog and Advanced Radar Technology

The defence electronics specialist has had a fabulous week and is currently trading at a strong EUR 87.30. The jump above the 50-day and 200-day SMAs shows that Hensoldt is once again in an uptrend by definition. The share price is being driven by growing demand for advanced radar and air defence systems, which have become indispensable in modern conflicts.

Financially, the group is also in excellent shape, supported by a record order backlog of over EUR 10 billion, which even exceeds its current market capitalisation. But, as is well known, orders are not revenue, and are a long way from being profits. In the first half, revenue climbed to EUR 1.17 billion, with an adjusted EBITDA margin of almost 12%. Despite ongoing risks and uncertainties, such as non-binding letters of intent for radar deliveries to Ukraine, the fundamentals remain robust. This shows demand exists, but whether it will translate into actual orders that generate revenue remains an open question.

Analysts at firms ranging from Jefferies to Kepler Cheuvreux see price targets of up to EUR 98 and recommend buying the stock. The investment thesis is based on Hensoldt's strong market position in Germany and Europe, where rising defence spending should support cash flows. On the other hand, high valuations and elevated P/E ratios, as well as the company's dependence on government budget approvals, are factors to watch closely ahead of the Q3 results on November 5 — incidentally, the same date as Rheinmetall's results.

Lahontan Gold: Gold Fever and PEA Update

While defence stocks provide security, Lahontan Gold promises pure speculative potential in the strongly trending precious metals sector. The share is currently trading in the lower part of the consolidation trend channel, which has now lasted for many months. With projects in Nevada's mining-friendly Walker Lane district, the company is optimally positioned to benefit from gold prices currently above USD 4,100 per ounce.

The recently presented, updated Preliminary Economic Assessment (PEA) for the flagship Santa Fe project reveals truly impressive key figures. The after-tax NPV5 stands at a massive USD 820 million, with an internal rate of return of 40.1% over an 11-year mine life. The operation is expected to produce about 91,900 ounces of gold equivalent per year, with initial capital costs estimated at a manageable USD 172 million and a pit-constrained resource of 2.385 Moz AuEq.

In simple terms, Lahontan's Santa Fe revised PEA presents a strong picture on paper. The mine is expected to operate for 11 years and produce approximately 92,000 ounces of gold equivalent per year, including other metals. Construction costs are comparatively low at USD 172 million, and the projected annual return of just over 40% is exceptionally high for a mining project.

However, it is important to note that gold prices, permitting and financing costs, as well as actual costs once the project gets under way, may all change. Nevertheless, this PEA update clearly indicates the project's direction, and the outlook is decidedly positive.

The share is currently trading around CAD 0.355, in the middle of a resistance zone. If it rises toward CAD 0.43, it should overcome this level, and a definitive breakout is likely at CAD 0.45 and above. It could then continue toward CAD 0.50 to CAD 0.55, and later toward CAD 0.75. This price target is derived directly from the share's first wave movement during its rise from CAD 0.12 to CAD 0.50. The groundwork for the start of production in 2027 is likely already being laid.

Conclusion

Rheinmetall impresses as a high-growth defence group with massive production capacity, while Hensoldt scores points with a record-high order backlog and strong sensor technology for military use. Lahontan Gold is an exciting explorer whose share price, backed by its strong PEA, could gain further momentum.