Good news from Almonty, record profits at Deutsche Bank and a cloud boom at Microsoft and SAP: Four promising stocks under review

Almonty: Sangdong delivers – the stock market remains sceptical

In the short term, the stock market is not always rational. A good example at present is Almonty Industries. While the share price has more than halved within six months, the tungsten producer is making operational history. After more than 30 years of inactivity, the Sangdong mine in South Korea is producing tungsten again. According to CEO Lewis Black, the first commercial shipment left the project on October 24.

In mid-September, Almonty received the final regulatory certificates for its processing and crushing plants. A few days later, the company reported its first concentrate production since 1993. The ramp-up is taking place gradually. According to Black, the plant operated around 16 hours a day in early October, with additional hours added every few days. The milling plant had already reached its intended throughput, and management said recovery rates were also developing as expected.

This marks the start of the decisive phase for Almonty. Once Sangdong operates continuously, it will produce and ship around 200 tonnes of tungsten concentrate each month. The second expansion phase is already underway in parallel. Additional mills have been ordered, and new underground areas are being developed. Processing capacity is expected to rise to up to 1.2 million tonnes of ore per year by 2027.

The underlying resource is attractive. According to the company, Sangdong has probable reserves of 8.6 million tonnes of ore with an average grade of 0.42% tungsten oxide. This makes the deposit one of the higher-grade tungsten deposits outside China. The crucial question now is whether Almonty can translate its geological advantages into stable operations with reliable delivery volumes and positive cash flows.

Almonty made early preparations on the sales side. The offtake agreement with Global Tungsten & Powders, a company belonging to Austria's Plansee Group, was improved further at the investor day in October. The term was extended by six years, the price was increased throughout the entire contract, and the previous discount was removed. Overall, the agreement now runs for 21 years from the first delivery. Following the ramp-up, a minimum volume of 210,000 MTU annually is envisaged. GTP processes the concentrate into tungsten powder in Pennsylvania, US. This creates a largely Western supply chain – from the mine in South Korea to processing in the US.

This is gaining political significance. From January 1, 2027, US defence procurement rules will exclude tungsten from China, Russia, North Korea and Iran. Suppliers will in future have to be able to provide complete evidence of where the ore was mined and processed. This is precisely where Almonty has an important competitive advantage: Sangdong is located in an allied country and offers fully traceable provenance.

While Chinese industry dominated tungsten prices for many years, the Western market is increasingly decoupling. Chicago-based futures exchange CME plans to introduce a tungsten futures contract in 2027. S&P Global Platts is also developing its own price assessment for tungsten produced outside China. Producers and buyers could use this to hedge prices over the long term, while the market, which has been highly opaque so far, would become significantly more transparent.

Prices remain high. For the intermediate product ammonium paratungstate (APT), recent asking prices averaged around USD 2,700 per MTU. For material actually available, spot prices were in some cases close to USD 3,000. As China continues to export hardly any tungsten intermediate products, Western supply remains tight. Almonty's ramp-up of Sangdong is therefore taking place in an exceptionally favourable market environment.

Almonty is also building a broader Western tungsten portfolio. In Spain, old spoil heaps at the closed Los Santos mine are to be reprocessed. In Rwanda, the company is already buying and collecting concentrate from local producers. According to the country's government, Almonty could become the country's largest tungsten exporter from November onwards. Adding to this are the planned expansion of the Panasqueira mine in Portugal and a tungsten project in Montana, US.

A molybdenum deposit about 90 m below the Sangdong deposit offers additional upside. New drilling is currently verifying historical resource data. According to Black, results so far largely align with expectations. As the deposit could be developed from the existing underground workings, development costs are likely to be comparatively low.

In the long term, annual production of around 5,000 tonnes of molybdenum is planned. A buyer has already been secured for the planned mine life. The contract includes a price floor but no price ceiling. If ongoing work confirms the historical data, molybdenum could become another significant contributor to earnings.

Analysts at Bank of America also consider the recent share price weakness excessive on fundamental grounds. Following the capital markets day, they reiterated their Buy recommendation and the price target of USD 24. By 2029, annual tungsten production is expected to increase more than ninefold from 2025 levels to around 5,600 tonnes.

The estimates are correspondingly strong. Free cash flow is expected to rise from USD 138 million in 2026 to USD 728 million in 2027. Analysts expect earnings per share to jump from USD 0.69 to USD 2.76. Their calculations already put the figure for 2028 at USD 3.00. At a current share price below USD 10, these forecasts would make the valuation exceptionally low. Other analysts are also confident: 11 Buy recommendations compare with 1 Hold rating. No analyst currently recommends Sell. With an average price target of just under USD 22.50, observers currently see 140% upside potential.

However, much needs to go right for these figures to materialise. Sangdong must manage the ramp-up, the second expansion phase must stay on schedule, and tungsten prices must remain high. Technical, geological and political risks, as well as capital requirements for the other projects, also remain.

For risk-tolerant investors, the current share price weakness nevertheless offers an attractive entry opportunity. Unlike many competitors, Almonty has not only a promising deposit but also decades of operating experience and a mine that is already producing and has shipped its first material. Its competitors have yet to provide this proof. However, given the high volatility, staggered purchases remain the most sensible strategy.

Deutsche Bank: Third consecutive record quarter

Deutsche Bank has definitively translated its restructuring into rising profits. In the third quarter, the bank posted EUR 1.9 billion in profit, its third consecutive record. Pre-tax profit rose by 8% to EUR 2.6 billion, while revenue increased by 4% to EUR 8.3 billion. After nine months, net profit totals a record EUR 5.9 billion.

The breadth of growth is particularly encouraging. Corporate banking, retail banking and asset management more than offset the somewhat weaker investment bank. In the third quarter alone, the bank attracted net inflows of EUR 47 billion in new client money. The combined assets under management of the private bank and asset management reached EUR 2.0 trillion.

The cost-to-income ratio improved to 62.4% from 64.4%. With a Common Equity Tier 1 ratio of 14%, the bank can both grow and return money to shareholders. For 2026, the management board is targeting a payout ratio of 60%. Share buybacks totalling EUR 1.5 billion have already been carried out.

Rising loan defaults and the investment bank's heavy dependence on capital markets remain risks. Provisions for credit losses rose 9% quarter-on-quarter to EUR 501 million. However, the quality of the loan portfolio remains stable for now.

The average analyst price target of just under EUR 37 currently still promises around 20% share price upside. The recommendation distribution is also favourable: 13 banks and research firms recommend Buy, while 7 favour Hold. Only 1 analyst currently recommends Sell. The estimated P/E ratios of around 7.8 for 2027 and 6.7 for 2028 appear attractive given expected operating profit growth over the next two years. Deutsche Bank remains a buy after its record results. Pullbacks offer an entry opportunity.

Microsoft: AI investments pay off

At Microsoft, the cloud business provides proof that its multibillion-dollar AI investments are meeting rising demand. In the first quarter of the new financial year, revenue rose 19% to USD 92.3 billion. Adjusted earnings per share rose 18% to USD 4.89, beating expectations.

Azure drove the strongest growth, up 48%. Total cloud revenue rose 30% to USD 63.9 billion. For the current quarter, Microsoft is even forecasting Azure growth of 49 to 50%.

Despite investments of USD 45.2 billion, the group generated free cash flow of USD 18.6 billion – around USD 10 billion more than expected. Nevertheless, the high expenditure remains the biggest risk. Some planned data centre capacity was delivered late, and the investment plans were not reduced.

With a P/E ratio of just under 29 for the current year and 25 for 2027, Microsoft's valuation is demanding but still justifiable given its excellent market position. Strong cloud growth, high recurring revenue and financial strength set the group apart from many other AI beneficiaries. International analysts therefore remain optimistic. A total of 57 banks and research services currently rate it a Buy. Only 2 analysts recommend Hold. There are no Sell recommendations. Although the average price target of just under USD 620 now offers only about 20% upside, Microsoft shares remain a long-term Buy. However, following the share price rise in recent months, investors should build new positions in stages and, above all, use weak trading days to buy.

SAP: The cloud delivers, AI promises more

SAP also shows that the cloud can already make good money. In the third quarter, the German software group exceeded EUR 10 billion in revenue for the first time. Revenue rose 13%, while operating profit increased 18%. Adjusted operating profit exceeded EUR 3 billion for the first time. Growth and rising profitability are thus going hand in hand at the Walldorf-based company.

The cloud business remains the main driver. Revenue here climbed by 26%, and by as much as 29% for the Cloud ERP Suite. The current cloud backlog provides further reason for confidence: At EUR 24.1 billion, it was 28% above the previous year's level. This provides a solid foundation for the coming quarters.

Artificial intelligence offers additional potential. SAP aims to deploy intelligent assistants directly where companies manage their finances, procurement or workforce planning. The economic appeal is clear: if workflows can be automated and decisions accelerated, the software becomes more useful to customers. For SAP, this opens the door to additional revenue.

According to analysts' estimates, the P/E ratio for 2027 is just under 25, and around 21 for 2028. For Europe's leading software company, that is not overpriced. Pullbacks therefore remain buying opportunities for long-term investors. However, most analysts do not expect further major share price jumps in the coming months. The average price target is EUR 235, representing upside potential of just under 13%. Overall, 25 analysts currently recommend buying the stock, while 7 recommend holding existing positions. 2 experts even recommend selling the shares.

For investors, the key remains how quickly these opportunities translate into profitable growth. Delayed customer projects and high expectations for AI products can trigger setbacks. However, the latest figures provide a convincing operational foundation. SAP thus adds a European software group to the selection, whose cloud business is already growing strongly and whose AI business opens up further opportunities.

Conclusion

Almonty offers the greatest share price potential among the quartet of stocks presented. However, following the start of production, management must demonstrate reliable deliveries and cash flows to sustain share price gains. The CME futures contract increases visibility into tungsten and underscores the market's strategic importance. Deutsche Bank impresses with record profits and rising distributions. However, Germany's leading bank remains dependent on the economy and capital markets. Microsoft combines strong cloud growth with enormous financial strength. However, the US software giant must justify its multibillion-dollar AI investments over the long term. SAP scores with a strongly growing cloud business, rising profitability and additional opportunities through AI. For the DAX-listed group, high expectations must translate into further success. Speculative investors will find the most exciting story at Almonty, while value investors will find a low earnings valuation at Deutsche Bank. Microsoft and SAP appeal to long-term growth investors who use pullbacks to build positions in stages.