January 2nd, 2025 | 07:15 CET
MOMENTUM stocks for 2025: Rheinmetall, Bayer, Almonty Industries - Should you buy now?
Rheinmetall and Almonty Industries are entering the new year with momentum and are on the hunt for new all-time highs: Almonty is one of the strong performers in the commodities sector in 2024, and 2025 should be even better. The Company plans to bring the largest tungsten mine outside of China into production. Based on the explosion in sales and profits in the coming years, analysts see more than 200% upside potential. Things are also going well at Rheinmetall. The defense company plans to double its profit by 2027, suggesting the stock is not expensive. However, there is also potential for a setback. Unfortunately, Bayer experienced only downward momentum in 2024. Is a turnaround in sight for the once-largest DAX company?
time to read: 3 minutes | Author: Fabian Lorenz
ISIN: RHEINMETALL AG | DE0007030009 , BAYER AG NA O.N. | DE000BAY0017 , ALMONTY INDUSTRIES INC. | CA0203981034
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Author
Fabian Lorenz
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
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Almonty Industries: Buy recommendation with single-digit P/E ratio
The Almonty Industries share ended 2024 at EUR 0.60. However, the 50% price increase will likely be only temporary. The same applies to the not-so-distant all-time high of EUR 0.86 in 2021. Analysts at the German company Sphene Capital have set a price target of CAD 3.21 for the Almonty share. The reason for the optimism: Almonty will attract worldwide attention in 2025 when it starts up the Sangdong mega-mine in South Korea - the largest tungsten mine outside of China. Tungsten is a critical raw material and indispensable in many key industries – from aerospace, defense and electronics to renewable energies. Accordingly, Almonty will be of strategic importance to Western governments. For example, the German KfW has already supported the development of the Sangdong mine in recent years with millions in loans. In addition, Almonty has already established contacts for strategic partnerships in the US, South Korea, Japan, and the EU.
Almonty is already producing tungsten with projects in Spain and Portugal. With Sangdong, the Company aims to triple production volume. As the start of operations approaches, the stock began its revaluation in 2024, and a solid uptrend has developed. Looking at analyst estimates for revenue and earnings growth in the coming years, the stock still has significant upside potential.
Sphene Capital expects Almonty to multiply its revenues and earnings in the coming years. In 2025, revenues are expected to be around CAD 91 million and net income CAD 20.7 million. For 2026, analysts then expect a significant jump to CAD 179 million in revenue and CAD 58 million in net profit. This would correspond to a single-digit P/E ratio for 2026, which appears significantly too low. Analysts agree with this assessment and recommend the Almonty share as a "Buy".
Rheinmetall: Profit to double again?
Like Almonty, analysts also recommend the Rheinmetall share as a "Buy". However, after the brilliant share price performance in 2024 and also in previous years, the upside potential appears to be lower than for the tungsten producer. Most recently, Deutsche Bank recommended the share of Germany's largest defense company as a "Buy" with a target price of EUR 700. According to marketscreener.com, 13 of 15 analysts recommend buying Rheinmetall shares. No one advises selling. The average target price is EUR 721. The security ended 2024 at EUR 614.
In view of the geopolitical situation, it is not surprising that Rheinmetall has ambitious growth targets for the coming years. Shortly before the turn of the year, CEO Armin Papperger set out ambitious targets in an interview with the Börsen-Zeitung: By 2027, the Company aims to double its revenue to EUR 20 billion. "If we succeed in increasing revenue to EUR 20 billion by 2027, it is also achievable to double earnings by that time. Otherwise, the multiples would no longer align," said Papperger in the interview. Rheinmetall plans to benefit from the planned European defense fund, which will have a volume of EUR 500 billion. This fund is intended to strengthen cooperation within Europe. However, Rheinmetall also aims to get a bigger slice of the defense pie in the US.
Should the growth be implemented as planned in the coming years, the Rheinmetall share does not appear to be expensive with a market capitalization of almost EUR 27 billion. The medium-term outlook remains positive. However, peace in Ukraine could initially lead to a significant price setback – perhaps an exciting entry opportunity.
Bayer: Where are the growth prospects?
Anyone who believed at the beginning of 2024 that Bayer shares, which were trading at around EUR 35, offered an exciting entry opportunity – after all, the share price was over EUR 60 – was disappointed. The Leverkusen-based company's shares were still a tragedy in 2024 and lost another 40% or so. Bayer is now only worth EUR 19 billion on the stock market. It is hard to believe, but in 2015, it was worth EUR 190 billion.
Can the turnaround be achieved in 2025? Speculating on this seems unlikely. On the one hand, Bayer is still heavily involved with court proceedings. These are never-ending and tie up important management capacities. The Company should be focusing on new growth drivers, but these are lacking. Revenue is expected to stagnate in 2025, and no significant momentum is in sight for the coming years either. It is, therefore, not surprising that most analysts see the Bayer share as a "Hold" position only.
The momentum at Rheinmetall and Almonty should continue in the new year. Rheinmetall should do well from the rearmament of Europe in the coming years. However, peace in Ukraine could lead to a significant price setback. The Almonty share is in a solid uptrend. Based on analyst estimates for the coming years, significantly higher prices are also possible. At Bayer, despite the share price disaster in recent years, there is no compelling case for a purchase. There is a lack of growth prospects.
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