Momentum plays with a new wave: Almonty Industries and Rheinmetall – what is Gerresheimer doing?

Almonty Industries – In a strong position!

Almonty Industries is benefiting from this situation. The Canadian company is set to start tungsten production at its Sangdong mine in South Korea this year and, through further expansion stages, will soon become the largest tungsten producer outside China. Tungsten is in high demand across many industries, especially in defense, due to its exceptional hardness and heat resistance.

With a deposit like Sangdong, the Western world can take an important step toward greater security of supply in the face of China's dominance. Almonty already has extensive experience and expertise in the construction and operation of tungsten mines. The Canadians have impressively demonstrated this through their many years of activity in Portugal. Given the sharp rise in tungsten prices in recent months, many of the previous assumptions are now proving to be too conservative.

The Company is also considering strategic acquisitions. It is examining takeover candidates in the US with the aim of establishing a production foothold in North America. The US, in particular, has a keen interest in critical raw materials. Almonty already has a number of long-term offtake agreements in place. At the same time, the Company is advancing work on a second critical raw material at the Sangdong site, molybdenum, with plans to define a resource and tap into another highly sought-after market.

Despite the excellent share price performance in recent months, Almonty Industries continues to offer good prospects. The share currently has a 2027 P/E ratio of 15, which is moderate given the growth momentum. The market capitalization is an impressive CAD 2.4 billion.

Rheinmetall – German Armed Forces place large order

The defense contractor's order books appear to be filling up further. According to Handelsblatt, the German Armed Forces are planning to place a large order for over 600 Skyranger air defense systems this year. The volume, including the necessary vehicles, is expected to amount to more than EUR 9 billion.

Analysts rate the stock as a "Buy" overall, especially as the shares are correcting somewhat from their all-time high, which was in the region of EUR 2,000. US bank JPMorgan recently rated Rheinmetall as "Overweight" with a price target of EUR 2,250. Analysts expect a mediocre Q3, but see a strong final quarter. Facts will be revealed on November 6, when the Company publishes its key figures for the third quarter.

Gerresheimer – Third profit warning in the current fiscal year!

Once again, Gerresheimer has made headlines with disappointing news. At the end of last week, the Düsseldorf-based company shocked the markets by issuing its third downward revision of annual targets for the fiscal year ending in November. The share price plunged again and has now fallen below the EUR 30 mark.

As demand from cosmetics and pharmaceutical companies did not pick up as hoped, CEO Dietmar Siemssen felt compelled to take this step. The Company announced a "comprehensive transformation program" aimed at improving operational performance and cash flow through cost-cutting measures and selective investments. Most recently, JPMorgan and Deutsche Bank lowered their price targets for the stock to EUR 46 and EUR 34, respectively.

Even the positive news that followed failed to lift sentiment: The US Food and Drug Administration (FDA) has approved one of Gerresheimer's products for the treatment of edema in congestive heart failure, with market launch planned for the end of 2025. Investors, however, remain unimpressed.

Defense stocks and producers of critical raw materials will continue to remain favorites among investors. Demand and industry trends are clearly positive. Almonty's role as a key supplier of essential raw materials is increasingly being recognized by the market, and the upward trend shows no signs of slowing. The fundamental valuation continues to offer room for growth. Gerresheimer, in contrast, can be classified as a turnaround candidate and requires patience and a long-term perspective from investors.