HIGHFLYER stocks with upside potential: Renk, TUI, Almonty Industries

Almonty Industries: More than 250% still possible

With a share price increase of around 50%, Almonty's stock is likely to be one of the top performers of 2024, and not only among commodity stocks. The prospects for continued strong growth in the coming year look promising. The tungsten producer is on the verge of commissioning its Sangdong mega-mine; thus, the company's revaluation has only just begun. This development is expected to multiply Almonty's revenue and earnings in the coming years. The analysts at Germany's Sphene Capital also share this view. Following the convincing nine-month report, the experts raised their target price for Almonty shares from CAD 2.31 to CAD 3.21. The stock is currently trading at CAD 0.89.

The analysts see more than 250% upside potential. The development in the first nine months was in line with analysts' expectations. The coming years will be decisive. Not only is the Sangdong mega-mine in South Korea scheduled to commence operations, but the already-producing Panasqueira mine in Portugal is also to be expanded. The analysts expect Almonty to massively increase sales and profits in the coming years. For 2025, they expect sales of around CAD 91 million and a net profit of CAD 20.7 million. In 2026, revenues are expected to reach CAD 179 million and net profit CAD 58 million. This puts the P/E ratio for 2026 at a favorable 4.

Almonty does not appear to have to worry about the demand for its tungsten. This critical metal is predominantly produced in China and Russia and is needed in the defense industry, among others. With a resource of 50 million tons (0.43% grade), Almonty could supply over 10% of global demand. Medium-term plans even suggest production could be doubled, adding acquisition potential to the investment case.

Renk: Over 50% upside potential

Renk's shares lost more than 5% yesterday. This continues the disappointing share price performance of the Company, which went public as an armaments player. Among other things, the transmission manufacturer is involved in the production of the Leopard 2 and Merkava tanks. For the year as a whole, the performance is minus 20%. By comparison, Rheinmetall has more than doubled, and the Hensoldt share has at least gained more than 40%.

A change in leadership is often seen as a positive move for struggling stocks, providing at least a short-term boost. Not so at Hensoldt. Investor uncertainty and the downward slide in the share price continued after the announcement that CEO Susanne Wiegand will leave the Company at the turn of the year. Berenberg, however, advises taking advantage of the weak share price. The analysts appeared optimistic after meeting with Wiegand. The outgoing CEO emphasized that her departure had nothing to do with the operational development. According to the Berenberg analysts, Renk remains well-positioned and operational prospects are positive. Therefore, the experts recommend Renk shares as a "Buy" with a price target of EUR 33.

TUI: Share breaks through the EUR 8 mark

Although TUI's shares are not an analyst favorite, they have broken through the EUR 8 mark. Yesterday, they traded above EUR 8.70, reaching their highest level since March 2023. The tourism group's latest outlook for the 2025 summer season has given the shares a boost. According to this outlook, TUI intends to continue its growth course. TUI is not only significantly expanding its range of hotel brands but is also adding numerous selected affordable hotels to its program.

Germany CEO Benjamin Jacobi commented: "We are offering more travel options and combining top quality with the best prices. Our guests will benefit from 400,000 additional vacation options in the most popular destinations, particularly in Turkey, Greece, the Canary Islands, Egypt and Dubai."

An above-average trend toward early bookings is emerging for the summer season. The Company's own hotel brands continue to be the growth drivers, with one in three customers choosing a TUI hotel at top Mediterranean destinations. As Europe's largest holiday hotelier, TUI plans to expand its portfolio to 600 hotels worldwide in the medium term. Early bookers are currently benefiting from savings of up to 40%. As a rule, the best offers for summer vacations are available until the end of February – for all destinations, whether near or far.

TUI appears to be finally sustaining its move above the EUR 8 mark. Nevertheless, there is still concern that if the economy remains weak, people will sooner or later cut back on vacation spending. By contrast, Almonty's share price rally seems to be only just beginning. If Sangdong is ramped up as planned, significantly higher prices should be possible. Renk went public with a lot of premature praise and has disappointed so far.