How European Lithium, Hensoldt, and Volkswagen are overcoming the supply chain crisis and creating potential in their portfolios

European Lithium – With strategic projects and full coffers

European Lithium has evolved from a pure lithium explorer to a diversified player in critical raw materials. Its portfolio comprises two central pillars: the Tanbreez rare earth project in Greenland and the Wolfsberg lithium mine in Austria. Both address the West's urgent need to reduce reliance on Chinese supply chains. While Wolfsberg is considered Europe's first fully approved lithium mine, Tanbreez impresses with its immense size and high grades of valuable heavy rare earths, which are indispensable for high-tech and defense applications. This strategic positioning makes the Company an interesting piece in the global raw materials puzzle.

The financial situation is robust. Through skillful partial sales of shares in its investment in Critical Metals Corp., European Lithium has recently generated significant cash inflows. These transactions, which did not dilute the Company's own shares, brought in a total of over AUD 180 million. The combined cash holdings of European Lithium and Critical Metals currently amount to approximately AUD 325 million. This financial strength allows management to look to the future with confidence and, at the same time, launch a share buyback program.

The connection to Critical Metals (CRML) is a key value driver. European Lithium continues to hold a significant stake of approximately 50% in the NASDAQ-listed company, which alone is valued higher than its own market capitalization of around AUD 323 million. From the management's perspective, this valuation discrepancy offers considerable potential. The financial inflows from CRML sales flow directly into the further development of the Company's own projects and underscore its role as a strategic financier and shareholder. This puts the Company in a good position to push ahead with its ambitious plans. The share is currently trading at AUD 0.19.

Hensoldt – Robust growth in turbulent times

The European defense industry continues to boom – and sensor specialist Hensoldt is keeping pace. In the first nine months of the year, both revenue and order intake rose sharply. Particularly impressive is the ratio of new orders to revenues, which jumped to between 1.6 and 1.9. Put simply, for every EUR 1 in sales, up to EUR 1.90 in new orders came in. This momentum is mainly driven by large orders in the core business, such as for state-of-the-art radar systems. The result is a bulging order book that will keep the factory floors busy for the foreseeable future.

Despite this robust demand, the Company's management has now revised its revenue forecast for 2025 as a whole to a slightly more moderate level, targeting around EUR 2.5 billion. Moderate growth of around 10% is also expected for the coming year. But that is no cause for concern. In the medium to long term, Hensoldt is sticking to its ambitious targets and continues to aim for growth of 15–20% per year. At the same time, profitability is to be continuously increased. The adjusted EBITDA margin is expected to be at least 18% in 2025. However, the slight dampening of short-term expectations demonstrates that the rapid expansion of capacity also entails operational hurdles.

How do analysts assess the situation? Overall, they are predominantly positive. Although some price targets have been lowered slightly following the latest announcements, the average price target remains at a solid EUR 96. The range of estimates extends from a conservative EUR 72 to an optimistic EUR 127. The majority of analysts continue to recommend the share with a "Hold" or "Buy." They cite the stable operating fundamentals, the record-high order backlog, and the strategically valuable positioning in the European defense sector as reasons for this. They are convinced that all of this will support long-term growth. The stock is currently trading at EUR 84.15.

Volkswagen – Mixed signals, but quiet optimism

Volkswagen's latest figures paint a familiar picture. On the one hand, strong operating forces are offset by significant extraordinary charges. In the third quarter, the Company achieved an operating profit of EUR 3.3 billion, corresponding to a margin of 4.1%. However, US tariffs already had an impact of EUR 800 million here. Looking at the first nine months, the discrepancy becomes clear. While revenue grew slightly to EUR 238.7 billion, operating profit slumped by 58%. In addition to tariffs, this development was driven by negative price and mix effects. On the positive side, however, order intake rose by 17%, and by as much as 64% for battery-electric models.

Despite subdued expectations, the Company confirmed its forecast for 2025 of stable revenue and an operating margin of between 2% and 3%. However, management indicated that the upper end of this range is more likely. This would mean an operating profit of EUR 2.7–4.4 billion for the fourth quarter. An important anchor of confidence is free cash flow, which reached EUR 3 billion in the third quarter. If this trend continues, 2025 could indeed end with positive cash flow. This discipline gives cause for hope, even if external factors such as chip supply continue to pose risks.

Potential margin gains are emerging for 2026. An adjusted operating margin of 4.5% in the first nine months of 2025, upcoming restructuring with a cost advantage of EUR 2.2 billion, and a lower margin burden from electric vehicles in the coming year are constructive elements. In addition, the CFO has signaled that capital expenditure has peaked. The five-year plan of EUR 165 billion is understood to be the upper limit. This strict cost control, coupled with the prioritization of cash flow, could put the Company on a sustainable positive course in 2026. However, the challenges in China and possible special effects remain constant companions. The share price is currently trading at EUR 97.64.

The global tech and defense industry is navigating a phase of strategic realignment, driven by supply chain risks and the race for critical raw materials. European Lithium is positioning itself as a strategic building block for Europe's raw material sovereignty with its projects in Austria and Greenland. Sensor specialist Hensoldt is benefiting from a full order book and robust growth in the European defense sector. Meanwhile, automotive giant Volkswagen is struggling with margin pressure, but is slowly returning to sustainable profitability thanks to strict cash flow discipline and recovered demand for electric vehicles.