Defense Stocks After Pullbacks: New Entry Opportunities in Rheimetall and RENK Group - Antimony Resources with Significant Upside Potential

Antimony Resources – Good News, Enormous Upside Potential

The critical raw material antimony plays a vital role in key industries of national economies and is gaining strategic importance due to the tense geopolitical situation. The most important applications for antimony are in military and security-related sectors. Here, antimony is practically indispensable. The market is currently dominated by China, Russia, and Tajikistan. Prices have already risen significantly in the past.

The 1,100-hectare flagship Bald-Hill property in the Canadian province of New Brunswick represents one of the largest antimony deposits in North America. An indication of the project's value can be gleaned from the technical report published last year. According to the report, the property contains 2.7 million tonnes of rock with antimony grades of 3 to 4%, from which a "reserve" of 81,000 to 108,000 tons of pure metal can be derived. This provides the project with geopolitical significance.

To more accurately determine the project's economic viability and value, the resource estimate announced for no later than spring 2027 in accordance with Canadian Standard NI43-101 is essential.

Extensive drilling data confirm a high-grade and extensive system with massive antimony-bearing stibnite deposits ("Sb"), including 5.10% Sb over 4.0 m, 2.15% Sb over 6.85 m, and 2.38% Sb over 9.60 m. The ongoing drilling program is focused on the Bald Hill main zone, which extends over a length of more than 700 m and a depth of more than 350 m. The company recently initiated environmental studies, an important step in the run-up to production.

The newly discovered Marcus Zone, which lies west of the main zone and, according to the company, "promises to be a significant enhancement to the potential of the Bald Hill Antimony Project," has also recently delivered good news. During exploration work approximately 30 m south of the original discovery, another massive, antimony-bearing stibnite mineralization was uncovered in the bedrock. This resembles the boulders originally discovered and extends the mineralization to a length of approximately 80 m.

The stock is currently trading just below the CAD 0.90 mark, valuing the Canadian company at around CAD 85 million. Analysts at GBC believe the shares could rise to CAD 3, suggesting significant upside potential!

Rheinmetall – New Major Contracts

Rheinmetall's stock continues its consolidation. Shares are currently trading at EUR 1,400, about 30% below the high. Most recently, the US investment bank Goldman Sachs confirmed its "Buy" recommendation and added the stock to its "Conviction Buy List." The research firm Jefferies raised its price target for the stock from EUR 2,020 to EUR 2,220, representing an upside of nearly 60%. Within the sector, experts now favor companies in the land defense segment, as these are considered the most attractive following the price correction. In contrast, their assessment of companies in the spare parts and retrofit sectors is more cautious.

Rheinmetall is expanding significantly beyond the traditional defense business, particularly in the drone sector, which is increasingly emerging as a growth driver. Through acquisitions and partnerships, the company has recently entered the naval sector. At the same time, the group is establishing a foothold in space and satellite communications together with OHB SE and other partners. As a result, the German company is evolving into a networked provider of modern and digital combat management.

The company recently announced a contract from the German federal government for drones worth over EUR 300 million. Delivery is scheduled for the first half of 2027. In addition, Rheinmetall launched series production of unmanned surface vessels, initially at a volume of 200 units per year, which can be scaled up to 1,000 units. Production takes place at the Hamburg shipyard Blohm+Voss, which the group acquired as part of its takeover of the naval company NVL.

RENK – Course Correction Despite Records

Despite record revenues and order intake, market participants were recently disappointed by last year's financial results. The final quarter fell short of expectations. A major main battle tank project for an international customer had been postponed to the current year. Stock market investors had also clearly expected more from the outlook.

RENK manufactures propulsion systems for military vehicles such as tanks and naval vessels, as well as for commercial shipping and industry. In 2025, revenue climbed by nearly 25% to EUR 1.37 billion. Operating profit (EBIT) rose by 22% to EUR 230 million. The dividend is set to increase from EUR 0.20 to EUR 0.58.

"Our strategy of consistently focusing on defense technologies is paying off," said CEO Alexander Sagel with satisfaction. For the current year, the company is forecasting revenue of more than EUR 1.5 billion and adjusted EBIT in the range of EUR 255 million to EUR 285 million. In addition, RENK has a record order backlog of nearly EUR 6.7 billion. Analysts' average price target currently stands at EUR 68, which corresponds to upside potential of a good 20%.

Given the structural growth drivers, defense stocks such as Rheinmetall and RENK are attractive following the price pullbacks. Antimony Resources targets antimony, a strategically highly relevant commodity market characterized by structural supply bottlenecks, limited substitutability, and rising demand. Analysts believe the stock has upside potential of over 200% over the next 12 months.