Forget Short-Term Hysteria—Win Long-Term with Rheinmetall, Almonty Industries, and RTX

Rheinmetall: Setback as an Opportunity?

The Bundeswehr's recent cancellation of the F126 frigates caught Rheinmetall off guard and triggered a share price slump of up to 17.4%. It was a deep cut that shrank the market capitalization by more than EUR 10 billion. But those who look closely will recognize the overreaction. Analysts at Citigroup and DZ Bank judged the reaction to be overdone, since the loss of operating profit would have amounted to just EUR 1.5 billion, spread over many years. The associated loss of confidence in the naval division is painful, yet the group's operating business remains on a record course.

The past few weeks impressively show that demand for Rheinmetall products remains unbroken. In July alone, the group secured a major international Skynex order worth several hundred million EUR, as well as a further ammunition order from Ukraine. Added to this is the strategic acquisition of a majority stake in DOK-ING, which expands the portfolio to include heavy autonomous vehicles. This is a step into the future. The second-quarter figures are set to be another. Revenue growth of over 60% is expected, and the order backlog should stand at around EUR 73 billion. To work through these orders, production capacities are being massively expanded.

NATO states have largely promised to ramp up their defense spending to as much as 5% of their economic output. That is precisely what is fueling a supercycle from which Rheinmetall, as one of Europe's most important defense suppliers, is likely to benefit disproportionately. The recent billion-euro order from Romania speaks volumes. For Lynx vehicles, Skyranger systems and more, EUR 5.7 billion is flowing to the group. Such sums make clear the pace at which countries are currently ramping up their defense capabilities. The loss of the F126 is frustrating, but vanishingly small compared with the long-term prospects. The current weakness is therefore less a cause for concern than an entry opportunity for investors who believe in the group's future. At present the share can be had for around EUR 1,093.40.

Almonty Industries: The Strategic Producer

June 2026 marks Almonty Industries' decisive transition from the development phase into operations. The Sangdong mine in South Korea has ramped up its processing plant and is producing saleable tungsten concentrate for the first time. With an ore reserve of around 139,700 t at a blended grade of 0.25% tungsten trioxide, the company has a solid basis for the ramp-up phase. At current market prices, this corresponds to a gross processing value of about USD 68 million, equal to roughly 2.6 months of Phase 1 throughput. The first batches use lower-grade ore to stabilize the process, yet this material is already about three times higher grade than that of the Portuguese Panasqueira mine.

The recent financing of USD 700 million in convertible senior notes was significantly oversubscribed, and the over-allotment option was fully exercised. The net proceeds of around USD 772.7 million strengthen the balance sheet considerably. At the same time, inclusion in the Russell 1000 and Russell 3000 occurred. This is an objective signal of the growing market capitalization of around USD 4.5 billion. In May and June, several analyst houses significantly raised their ratings for Almonty Industries. With the production start of the Sangdong mine in South Korea and strong quarterly figures, the houses see the company at the beginning of a structural re-rating. Most recently, Cantor Fitzgerald raised its price target to USD 25.50 on July 1. Almonty is positioned as a potentially defining Western supplier of tungsten for defense and high-tech applications.

Strategically, the timing could hardly be more favorable. From 2027, US authorities will ban tungsten imports from non-allied states, while China tightens its export controls. Almonty has relocated its headquarters to Dillon, Montana, positioning itself as a domestic supplier for defense applications. In parallel, a large molybdenum drilling program of 12,000 m is underway, while the planned tungsten-oxide plant is intended to extend the value chain. The recent share price decline following the capital increase opens an attractive entry point for investors betting on the structural tungsten shortage and the geopolitical realignment of Western supply chains. One share currently trades at around USD 15.71 on the NASDAQ.

RTX: Ahead of the Quarterly Figures

The past few months have shown that RTX is caught up in exceptional order momentum. In June alone, Raytheon secured a USD 1.1 billion contract for Sidewinder missiles and a further naval order worth USD 515 million for SPY-6 radar systems. Added to this is the ambitious construction of a space telescope for commercial platforms. This is proof that the company thinks technologically beyond classic defense goods. The total order backlog of USD 271 billion, of which USD 109 billion is in the defense sector, creates planning certainty. At the same time, the Trump administration is emphatically driving forward ammunition production, a political tailwind that plays directly into RTX's hands.

While Raytheon is in the spotlight, the other segments also deliver solid contributions. In the first quarter, Pratt & Whitney posted maintenance growth of 19%, driven by rising maintenance volumes of the GTF engines. The challenges are well known, but MRO capacities are being expanded, and the milestone of 1 million flight hours with the F119 engines underscores the technical substance. Collins Aerospace, with an operating margin of over 17%, remains the group's anchor of stability. The combination of civil aviation, defense and services makes RTX less dependent on cyclical swings than many pure-play defense groups.

Current developments suggest that RTX is benefiting from long-term trends such as the replenishment of ammunition stocks in NATO, the structural need for air defense and the ongoing flight operations with aging fleets. The dividend continuity since 1936 signals financial discipline, and the confirmed full-year guidance shows that management is confident. The Pratt risk does remain, but the progress in maintenance and the growing order intake at Raytheon outweigh it. July 23 will bring further clarity, but the direction is right. At the moment, the share costs around USD 199.25.

The recent defense correction is not a break in the trend but a tactical entry window for long-term oriented investors. Rheinmetall convinces with a record order backlog of EUR 73 billion and remains the central beneficiary of Europe's rearmament. Almonty Industries, with the Sangdong production and the US reshoring strategy, has laid the groundwork for future tungsten market leadership. RTX Corporation impresses with a diversified portfolio and an order mountain of USD 271 billion. Short-term volatility should not obscure the view of these unbroken, structural drivers.