DISAPPOINTMENT at Puma! RENK "Top Pick" or "Hold"? RE Royalties awakens!

RE Royalties: AI beneficiary and dividend gem

Did you miss out on the AI energy boom with stocks such as Siemens Energy, Nordex, or GE Vernova? A latecomer in this field is AI beneficiary and dividend gem RE Royalties. Given the company's positioning, the limited market attention is striking. With its focus on renewable energy and storage systems, as well as activities directly in the US, it is a clear beneficiary of the energy hunger of AI data centers. Peter Leighton, COO of RE Royalties, pointed this out again in a recent interview with Lyndsay Malchuk from the International Investment Forum.

He began by outlining the company's royalty model, which is unique in the energy sector. The company is consistently focused on clean energy – not as a "passive" source of income, but as a scalable growth platform. Project developers receive capital from RE Royalties without giving up any shares. In return, RE Royalties receives interest on the loans and a small share of future revenues. RE Royalties invests exclusively in solar, wind, and battery storage. Battery storage now accounts for about half of the business. Overall, the leverage of the business model lies in the term and the structural tailwind of rising electricity demand – especially from data centers and AI. Although many projects are contracted for 20 years, RE Royalties participates in the entire project life through royalties. Electricity is special in this respect: globally indispensable, but regionally regulated and not freely transportable. This results in more predictable, recurring revenues with less susceptibility to price shocks than with traditional commodity royalties. The biggest hurdle at present is less the project pipeline than access to capital, because investors often chase after the "hot topic." However, this is precisely where Leighton sees an opportunity for new investments. RE Royalties has operational leverage and now plans to tap into larger sources of capital to serve "bigger fish." For the near future, he cites a pipeline of around USD 50 million in projects with existing and new partners. This should drive growth.

Incidentally, RE Royalties is also a dividend gem. In 2025, a dividend of CAD 0.04 was distributed. Investors can speculate on a similar amount in the current year. The share is currently trading at around CAD 0.34. Despite the recent jump in the share price, the dividend yield is therefore over 10%.

https://youtu.be/n_aO2Hv12p4?si=V9cCrsDcQF_UCflT

RENK: "Top pick" or "Hold"?

While RE Royalties' share price has jumped, RENK's share price has trended weaker in recent days and is trading at EUR 53, the same level as in May 2025.

From the perspective of analysts at mwb research, the specialist in military vehicle transmissions is thus fairly valued. Following the correction, analysts have adjusted their recommendation from "Sell" to "Hold." With an EV/EBITDA of 18.7x for 2026, the stock is not cheap, but it is no longer overvalued compared to the DCF-based price target of EUR 53.00. Achieving the adjusted EBIT forecast of EUR 210 to 235 million for fiscal year 2025 remains realistic. Weaker industrial demand, exchange rates, and tariff disputes would have a negative impact. German restrictions on arms exports to Israel would have a noticeable impact on RENK. Incidentally, analysts at RENK expect sales to grow from EUR 1.3 billion to EUR 1.5 billion in the current year.

Analysts see an escalation in the Middle East as a possible driver for the stock. This is indicated by the more comprehensive strengthening of the US presence. In addition to the aircraft carrier USS Abraham Lincoln, air forces and additional air and missile defense systems would also be deployed to the region. This is significant for RENK because the company is involved in Israel, which would likely "benefit" from further escalation in the Middle East.

Analysts see no direct risks for RENK in the IPO of the Czechoslovak Group (CSG). CSG focuses primarily on wheeled vehicles. This category is not part of RENK's core market.

Jefferies recently expressed a slightly more optimistic view of RENK.
In an industry study, the company is a "Top Pick" in the defense sector. Analysts recommend the share as a "Buy" with a price target of EUR 75.

Puma: No relief from short-term operational issues

At Puma, the expected surge in share prices following ANTA's entry has failed to materialize. The Chinese group paid EUR 35 per Puma share for its stake of just under 30% in the German sporting goods group. The share is currently trading at less than EUR 24 on the stock market. Analysts remain cautious about the prospects for Puma and its shares.

For mwb research, Puma shares remain a "Hold" position. After several months of speculation, ANTA would now become Puma's largest shareholder, but nothing more. The terms of the share purchase agreement stipulate that a takeover bid for the purchase of additional shares could only be made in 15 months. Therefore, despite additional long-term options, the investment has no impact on Puma's short-term fundamentals.

The group's operating performance will therefore remain the driver for the share price for the time being. And the outlook is not very positive. Puma is in the midst of a comprehensive operational and structural realignment. While the strategic direction has been clearly formulated, implementation is not yet complete, and this is weighing on short-term visibility. Analysts at mwb research expect Puma's revenue to decline from EUR 7.4 billion in 2025 to EUR 7.0 billion in 2026. However, EBIT is expected to return to positive territory, rising from EUR -200 million in 2025 to EUR 118 million in 2026. Analysts therefore currently consider Puma shares to be fairly valued at EUR 21.

Energy will remain in high demand in the coming years. Huge new capacities are needed to enable the AI boom. RE Royalties is benefiting from this and is also paying out an attractive dividend. In contrast, disillusionment has set in at Puma. The hoped-for takeover has not materialized for the time being, and operational problems are back in focus. The stock is probably protected against further declines, but the short-term upside potential is gone. RENK remains a basic investment in the defense sector, but it needs further large orders in the current year.