Full Order Books, Weak Share Prices: Is This a Buffett Opportunity? Almonty Industries, Rheinmetall and Renk in Focus!

Almonty Industries: US Investment Bank Stifel Sees Potential for the Stock to Double

Almonty's strategic footprint is growing steadily. The company focuses on tungsten projects. With Panasqueira, Portugal, the group already operates a site that has been in production for years. The Sangdong Mine in South Korea represents the decisive step toward growth. The company recently received the final inspection certificates for the processing and crushing facilities. This gives the green light for commercial operations, including the sale of tungsten concentrate.

Tungsten is an extremely hard, dense, and heat-resistant metal that, due to its unique properties, is strategically important for the defense, high-tech, and industrial sectors and is difficult to replace. According to the US Geological Survey, China accounted for approximately 82% of global mine production in 2024. Effective January 1, 2027, the US Department of Defense will also ban tungsten imports from China, Russia, Iran, and North Korea. This will further exacerbate the market situation; prices have already risen significantly in recent quarters.

When the second expansion phase at Sangdong begins at the end of next year, the company will reach its next milestone. At full capacity, the mine will then be able to meet 40% of Western demand. These figures underscore the mine's geopolitical significance. The company has also made significant progress on the sales side. The agreement with Global Tungsten & Powders, part of the Plansee Group, which was amended in July, has been extended to 21 years and, according to the company, covers more than 90% of production from the first expansion phase.

A few weeks ago, Almonty also announced an agreement with the government of Rwanda. In addition to exploration, the agreement covers purchasing, processing, and exporting material from existing local producers. Another central processing plant is planned as a later step. The ramp-up of US production is also scheduled for the coming months. Last year, Almonty acquired a historically productive tungsten property for this purpose.

Numerous research firms and banks are tracking the stock. Most recently, the US investment bank Stifel joined their ranks. The experts share the positive outlook of the majority; only Goldman Sachs remains overly cautious. The Stifel experts provided a multifaceted rationale for their price target of USD 25 and see the potential for the stock to double in value.

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Rheinmetall: Are the Execution Risks Overestimated?

The stock of the German defense heavyweight has dipped below the EUR 1,000 mark and is currently trading around EUR 950, a level that board member Papperger recently took advantage of to buy shares. Just a year ago, the shares were trading near their all-time high of around EUR 2,000. Even though the long-term growth outlook is favourable because of the geopolitical situation and massively rising defense budgets, share prices are currently falling across the industry. The boom is not over, but the stock market is becoming selective.

The cancellation of the F126 frigate program, for which TKMS was ultimately awarded the contract in a modified form, demonstrated that realizing potential does not always go smoothly. As a result, Rheinmetall reduced its 2026 revenue forecast by EUR 300 million to between EUR 13.7 and 14.2 billion. The expected operating margin is around 19%. At the same time, investments, inventory buildup, and deferred prepayments significantly weighed on operating free cash flow in the first half of the year. Analysts have set an average price target of EUR 1,600, which corresponds to upside potential of around 70%.

Renk: A Champion at a Bargain Price?

NATO member states have committed to increasing their defense and security-related spending to 5% of gross domestic product by 2035. Industry players are riding this wave. Renk's position as a specialist at a crucial point in the military value chain is highly advantageous. The company develops and manufactures transmissions, drive systems, and chassis solutions—without which many modern battle tanks and military vehicles could not function. Of particular note is its strong position in heavy-duty drive systems for heavy combat vehicles, which makes Renk a key supplier to Western armed forces.

In the first half of the year, order intake rose by just under 30% to approximately EUR 1.2 billion. Revenue grew moderately by 3% to EUR 637 million, while adjusted operating profit rose by 10% to EUR 98 million. The outlook for the full year was set at revenue of EUR 1.5 billion and adjusted operating profit (EBIT) of EUR 255 million to EUR 285 million. From its all-time high of EUR 90 about a year ago, the stock has corrected significantly to EUR 38, bringing the market capitalization to EUR 3.8 billion. Analysts are optimistic and have set an average price target of EUR 63. This implies upside of around 66%.

The defense boom is still going strong, but the stock market now demands more than just full order books. Rheinmetall and Renk must prove that they can translate their tremendous growth prospects into revenue, margins, and cash flow. This is precisely where Almonty offers a different investment story. The company is positioned at the beginning of a strategically important value chain with tungsten and, thanks to the Sangdong mine, could soon rise to become the most significant Western supplier of this critical raw material. Analysts at the US investment bank Stifel believe the stock has the potential to double in value.