Iran Crisis: Billions in Weapons and Technology – Are Rheinmetall, RENK, and Group Eleven Set to Soar?

Group Eleven Resources – How the EU Secures Critical Metals

Europe is under pressure to act! The projects of Group Eleven Resources in Ireland appear quite helpful. This is because the Canadian exploration company has focused on discovering significant zinc deposits and, since its founding, has built up an extensive license portfolio in one of Europe's most productive zinc regions. Following a well-defined selection process, it now holds numerous exploration licenses covering a total area of more than 500 sq km, making it one of the larger landholders in the Irish zinc belt. The strategic focus is on the PG West, Stonepark, and Ballinalack projects, which are located in close proximity to existing large-scale deposits and thus offer favorable geological and infrastructural conditions. Added to this are all the advantages that Ireland offers as a location: infrastructure, short distances, and efficient laboratory logistics.

Particular attention is being paid to the Ballywire deposit within the PG West project, which was discovered in 2022 and has since been regarded as one of the most significant mineral discoveries in Ireland. The deposit not only exhibits classic zinc and lead grades but also features a complex metal inventory including silver, copper, and technologically relevant trace elements, which significantly expands its economic potential. Since the discovery, numerous drill holes have been completed, demonstrating a continuous extension of the mineralized system and laying the foundation for an increasingly robust geological model. Additional indications of deeper-seated copper and silver zones suggest that the mineralization is structurally controlled and could continue over greater distances.

A recently completed capital raise of approximately CAD 12 million has strengthened the financial base, allowing for a significant expansion of ongoing programs, with additional drilling planned for the coming years, focusing on Ballywire and Stonepark. The Stonepark project, in which the company holds a majority interest, already has a defined zinc-lead resource and is located directly adjacent to one of the largest undeveloped deposits worldwide, suggesting potential for additional synergies.

Against the backdrop of growing European efforts to secure strategic raw materials and increasing indications of a large-scale multi-metal system, Group Eleven thus has the potential to establish itself as a major supplier of critical metals within Europe in the medium term. The current market value of CAD 285 million could rise rapidly, especially if the market properly values the major silver discovery!

CEO Bart Jaworski discusses the latest major silver discovery on Stockhouse.

https://youtu.be/qHNvSE4psgY?si=p-ifxzQAIHvpZzbQ

Rheinmetall – Is a 30% Consolidation Enough?

A major buyer of industrial metals of all kinds is the defense contractor Rheinmetall. The company's shareholders can look back on a 2,200% return over the past 4 years. However, the stock price has consolidated by over 30% in the last 3 months, which is no longer making all investors happy. As is typical for all defense stocks, the market has driven the German industry leader sharply higher in recent years until its valuation had completely outpaced operational realities. Most recently at EUR 2,005, the company was valued at a 2026 P/E ratio of 52. At the current price of EUR 1,550, the ratio drops to at least around 40, while CEO Papperger is raising the outlook through 2030 to revenue of just under EUR 42 billion—a fivefold increase from 2025 levels. The much-watched price-to-sales (P/S) ratio, currently over 5, would then even drop to 1.8. But why investors are already anticipating the entire development of the next 5 years seems quite bold to us, as NATO countries in particular are currently facing major budget problems. And should the Iran conflict last longer than expected, the EU even faces the threat of a massive energy crisis, complete with a subsequent recession and falling tax revenues! It is therefore highly doubtful that Rheinmetall should be celebrating a boom here. Therefore: Sell while strong!

RENK – Larger NATO Contracts

The "Rheinmetall" overvaluation problem applies 1:1 to Augsburg-based RENK as well. The stock surged to a price of EUR 90 in October, only to then drop by half by the end of March. At RENK, estimated 2026 revenues are valued at a P/S ratio of 3.5, while earnings are valued at a P/E ratio of 32. Currently, the market assumes annual growth of around 20%, which would make a significantly lower P/E ratio between 20 and 25 appropriate. Investors were recently spurred by new orders totaling EUR 157 million from the NATO sphere. The order list includes tank transmissions, as well as training and spare parts. Delivery is scheduled to begin in Q3 2026 and is expected to extend through 2033, for a total duration of 7 years. This increases the corresponding annual revenue by approximately EUR 22.5 million, or 1.5% of planned revenue in the first fiscal year. According to the company, the underlying tank program opens access to additional international markets within the NATO sphere. So far, so good—but with a 3% weekly gain, the stock market reacted only weakly to the relatively good news. The reason: RENK would need 10 such orders to justify its current valuation. 14 out of 16 analysts on the LSEG Refinitiv platform are nevertheless positive and calculate a 12-month price target of over EUR 69. Only the German research firm mwb rates the stock "Hold" with a price target of EUR 53. That sounds much more reasonable!

The stock markets are waiting for concrete results from the Middle East. Since these simply are not materializing, the volatile ride will likely continue for a few more weeks. Investors should keep in mind that the duration of the conflict will determine the economic parameters for 2026 and beyond. A well-defined diversification strategy, including hedges, has become essential for a portfolio. Commodity stocks represent a smart hedge against inflationary trends.