May 19th, 2022 | 13:31 CEST
Booster for the BioNTech share: BASF and Defense Metals with momentum?
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For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
Defense Metals: Strong drill results not enough?
Today, there could be new momentum for the exciting rare earth explorer, Defense Metals. CEO Dr Luisa Moreno will speak at 3:20 pm at the IFF virtual investor conference. Interested investors can register for free here until shortly before the start of the presentation. Defense Metals owns Wicheeda, a huge rare earth deposit in Canada. It covers around 2,000 hectares and already has rare earth mineral resources of 4.9 million tons. Another 12 million tons are believed to still be in the ground. Earlier this year, Defense Metals conducted a 29-hole, 5,349m resource expansion and diamond drilling program at the Wicheeda property. Positive drill results have been coming in regularly since early February - although this has not allowed the stock to decouple from the weak overall market. The latest success story came at the end of April. A total grade of 3.09% was proven over a distance of 251m. A week earlier, Defense Metals had already reported a 3.81% grade rare earth oxide enrichment over a length of 117m. According to the experts at researchanalyst.com, the Wicheeda project should be in production in about five years and, as things stand today, could become one of North America's most important producers. A detailed analysis can be found here.
By way of background, rare earths are often overlooked when discussing commodity dependence. And wrongly so. Rare earths are present in almost all technologies. Not only in smartphones and electric cars but also in modern military technology. The problem from a strategic point of view: China dominates the world market. Alternatives are hardly available. Defense Metals is working to change that. The Canadian explorer could offer around 10% of current global production in the future. From the point of view of the experts at researchanalyst.com, the Canadians should be considered an attractive takeover candidate by larger companies such as Lynas or MP Materials.
BioNTech: Share with its first booster
BioNTech's stock has held up relatively well in the sell-off of recent weeks, especially compared to vaccine competitor Valneva. However, for the share of the Wiesbaden-based biotech high-flyer to sustainably move forward again, new impulses are needed. Goldman Sachs also shares this opinion. Thanks to strong sales of the Corona vaccine, BioNTech generated more revenue in the first quarter than analysts had expected. In the coming weeks, the focus should now turn to trial data on the pediatric vaccine - which the FDA approved yesterday - and the Omicron-specific vaccine, the experts said. They leave the rating at "Neutral". However, the price target of USD 255 is significantly above the current level of USD 157. BioNTech has also exceeded the estimates of JPMorgan. The analysts have a price target of USD 183. Even if the Corona vaccine should lose importance, the Company is well-positioned in oncology. In the second half of the year, things should get exciting at BioNTech. Numerous study updates are expected, for example, on the active substance against skin cancer and on the mRNA based cancer vaccine. There should also be news on an mRNA vaccine against influenza. Should the data turn out to be positive, a real booster for the share can be expected.
BASF: Analysts reduce price targets and see costs in the billions
There is currently no positive impetus in sight for BASF. High energy prices and fears of a recession are weighing too heavily. And then there is the possible gas cut-off - whether by Germany or Russia turning off the tap. It would have a massive impact on BASF's production in Germany. Analysts are accordingly cautious. Société Générale continues to rate the chemical group as "Hold", with the price target reduced from EUR 59 to EUR 50. Baader Bank left its rating at "Add" but lowered its price target for BASF shares from EUR 60 to EUR 53. A German embargo on Russian oil and gas would mean a cost explosion of up to EUR 7.9 billion for the DAX-listed group. The probability of an actual oil embargo is currently increasing. This risk is lower for Russian gas, he said. Other groups such as Wacker Chemie, Covestro, K+S, Evonik and Lanxess would also be affected. BASF shares are currently trading at around EUR 50.
Investors currently need strong nerves. BioNTech is holding up well, but it needs positive study results. Defense Metals regularly delivers positive drill results, but it needs more for the knot to finally burst. At BASF, investors and analysts are cautious.
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