DRUMROLLS for Hensoldt, SFC Energy, Argo Graphene Solutions shares!

Argo Graphene Solutions: Moving toward commercialization with a bang

Argo Graphene Solutions has announced decisive steps toward commercializing its graphene-based building materials. By incorporating graphene into concrete, cement, and asphalt, Argo aims to revolutionize the construction industry. This is because graphene improves building materials in a variety of ways. Compressive strength is expected to increase by 30%, and abrasion resistance is likely to increase by as much as 70%. Overall, the aim is to extend service life, reduce maintenance requirements, and lower material consumption.

Following the recent opening of a site in the US, Argo Graphene Solutions has reached another key milestone on its path to commercialization: the announcement of a strategic partnership with Ceylon Graphene Technologies. Under the agreement, the Sri Lankan group will supply Argo with high-quality raw materials in the future, specifically graphene oxide paste with a purity of at least 20%, derived from 99% pure gangue graphite. Argo has committed to a minimum purchase volume of 1,000 kilograms, with the goal of increasing purchases to at least 4,000 kilograms during the two-year contract period.

The partnership also provides for technological cooperation. The aim is to exchange information in the areas of product design, mixing processes, and liquid dispersion techniques to accelerate the development of advanced integral additives for building materials.

With this announcement behind it, the stock should now be able to take off again.

Hensoldt: Time to sell the stock?

Analysts at mwb Research do not believe the Hensoldt share will take off again anytime soon.

For them, Hensoldt is a "Sell". The experts see the fair value of the stock at EUR 70, which is around 20% below the current price level. Their main point of criticism is that the valuation no longer fits the business model. Hensoldt is now trading at almost the same valuation multiples as Rheinmetall. In the past, however, Hensoldt always traded at a discount because its growth and profitability were significantly lower. Based on current forecasts, this does not appear to be changing: While Rheinmetall is expected to achieve around 253% revenue growth and EBIT margins of around 25% by 2033, analysts expect Hensoldt to achieve only 119% revenue growth, with margins of around 15% to 16%.

There should also be a structural risk discount, as Hensoldt is not making significant progress in terms of internationalization and generates around 60% of its revenue in Germany. In conclusion, the mwb analysts warn that investors are currently paying "Rheinmetall prices" for Hensoldt, but are only getting half the growth and significantly weaker profitability in return. Therefore, the "Sell" recommendation remains unchanged.

SFC

Things are happening rapidly at SFC Energy at the moment. Most recently, we reported on Monday about a follow-up order from Canadian company Latium Technologies. According to the report, SFC Energy will supply fuel cells and methanol tank cartridges worth CAD 1.2 million for AI-supported solutions with 24/7 live monitoring.

Now the order book is ringing again: This time it is an order from the US with a volume of around USD 4 million. According to the US SFC, a long-standing customer in the field of civil security technology has placed an order for EFOY Pro fuel cells. There, too, the customer is using SFC fuel cells for the off-grid power supply of mobile surveillance and security systems. The order is expected to generate revenue in the current year. SFC CEO Peter Podesser views the order as further evidence of the Company's technology's competitive strength.

SFC also announced that it will expand production in the US to minimize customs duties and currency risks. SFC expects local US production to provide a sustainable growth boost in the dynamically growing market for mobile security technology.

Following the announcement, Warburg Research reaffirmed its "Buy" recommendation for SFC shares. The price target is EUR 21, a good 30% above the current price of around EUR 16. From their perspective, the growth drivers of defense and infrastructure remain intact.

With this announcement, SFC is working to rebuild investor confidence. However, the muted share price reaction suggests that many investors are still processing the recent profit warning. In contrast, there are good reasons for Argo Graphene Solutions' share price to rise. Its latest partnership highlights real progress toward commercialization. If successful, the upside potential for both the Company and its shares is huge. Hensoldt**, meanwhile, appears to have already priced in much of its potential. The analysts at mwb are rubbing salt in the wound. Hensoldt needs to improve its growth and margins.