CHAOS at DroneShield! OUT of Hensoldt? New price target for Almonty?

Almonty Industries: New all-time high soon?

Oppenheimer analysts see several catalysts for rising prices in Almonty's stock. In their latest update, they recommend buying the tungsten producer's shares. The price target is CAD 12, representing a potential upside of around 20%. This is likely only a temporary pause, as there are many reasons to believe prices will continue to rise.

Tungsten is a critical metal that will remain subject to export controls even after the truce in the US-China tariff war. Exports from China to the rest of the world are only possible under strict conditions, as the metal is crucial for armaments and high-tech applications.

Almonty already operates a tungsten mine in Portugal, which generated revenues of around CAD 9 million in Q3, in line with analyst expectations. Experts anticipate massive growth in the coming years: revenues are expected to exceed the CAD 100 million mark next year and surpass CAD 600 million by 2028.

The foundation for this tremendous growth has already been laid. Years ago, Almonty secured and reactivated the Sangdong mine in South Korea. All sections are currently undergoing intensive testing before production is gradually ramped up. Sangdong is expected to make Almonty the largest tungsten producer outside China and Russia. A molybdenum deposit has also been discovered there. CEO Lewis Black repeatedly emphasizes that production is state-of-the-art and thus significantly more efficient than in China. At the same time, a new section is planned for the Portuguese mine. And then there is the latest development: the acquisition of a tungsten project in the US. Little is known about the scale of the Gentung Browns Lake project in the US state of Montana, but production is scheduled to start by the end of next year. This should put Almonty in pole position to supply the US with this critical raw material.

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Hensoldt disappoints

While analysts are optimistic about Almonty, Hensoldt disappointed experts at its capital markets day. There is still no sign of a supercycle in the German defense industry.

Jefferies remains a "Hold" rating on Hensoldt with an unchanged price target of EUR 92. This was the outcome of the sensor specialist's recent Capital Markets Day focused on military applications. During the event, Hensoldt's management outlined its medium-term strategy. However, analysts view the targets for 2026 to be below current market expectations – particularly in terms of revenue growth, profitability, and cash efficiency. From their perspective, this limits the short-term risk-reward profile. The long-term picture is more favorable: the strategy through 2030 aligns more closely with consensus forecasts and could strengthen confidence in the Company's structural growth trajectory.

The picture is similar to that of Rheinmetall. The quarterly figures of Germany's largest defense contractor did not impress in terms of order intake. In any case, the supercycle has so far been smaller than stock market traders had expected and is priced into the market capitalization of the sector.

DroneShield causes chaos

Large orders are already factored into DroneShield's valuation. The stock has gained over 300% in the current year, and its market capitalization stands at an impressive AUD 2.9 billion. And this despite the fact that the stock has more than halved in recent weeks.

In the past two days alone, the stock has plummeted by more than 10%. The reason for this is not only the market environment, but also the Company itself. On Monday, the drone defense specialist reported an alleged AUD 7.6 million order from the US government. The stock market reacted immediately, and the share price shot up 10%. However, shortly afterward, trading in the stock was suspended. The reason: the Company had to backtrack. It clarified that the order was already in place and had merely been confirmed. Embarrassing.

Such events shake confidence in management. This is particularly true for a company that has received a lot of early praise. Such missteps really should not happen.

At Almonty, the official commissioning of the Sangdong mine and details about the size of the US mine could drive the share price toward an all-time high. The medium-term outlook is excellent anyway, as the issue of tungsten scarcity is likely to remain a topic of concern for the economy and the stock market for a long time to come. Hensoldt, Rheinmetall, and others are valued aggressively. To justify this, real large orders are finally needed. This also applies to DroneShield.