Close menu




March 8th, 2023 | 16:22 CET

Nel share slumps, a 60% chance with Bayer, Almonty Industries and BASF

  • Mining
  • Tungsten
  • Pharma
  • chemicals
Photo credits: BASF SE

The Nel share was one of the big daily losers yesterday. As a result, the upward trend has finally been broken, and analysts' opinions differ widely. Berenberg sees the BASF share as a hold after the publication of the quarterly figures. The price target is EUR 55. The figures are in line with expectations. However, the end of share buybacks and concerns about future competitiveness weigh on the stock. By contrast, analysts see up to 60% upside potential for Bayer. Almonty Industries is benefiting from the boom in electromobility and also defense spending. As the leading tungsten producer outside China, analysts suspect it could soon come to a bidding war.

time to read: 4 minutes | Author: Fabian Lorenz
ISIN: NEL ASA NK-_20 | NO0010081235 , BAYER AG NA O.N. | DE000BAY0017 , ALMONTY INDUSTRIES INC. | CA0203981034 , BASF SE NA O.N. | DE000BASF111

Table of contents:


    Almonty Industries: Becoming a hot takeover candidate

    Whether electromobility or alternative energy supply, it is impossible without tungsten. And recently, tungsten has also been considered a raw material for batteries because the rare metal is suitable to replace the controversial cobalt. Asian manufacturers such as BYD also hope to increase charging performance, endurance and safety by increasing the proportion of tungsten in batteries. If the development continues, tungsten demand could go through the roof, according to experts at researchanalyst.com. As a result, Almonty Industries is increasingly becoming a hot takeover candidate because the Company is well on its way to becoming the leading tungsten producer outside China.

    As early as next year, the largest tungsten mine outside China will be commissioned in South Korea - thus close to major battery producers such as Samsung and Toshiba. The Canadian company already operates smaller mines in Spain and Portugal. But the Sangdong mine in South Korea will take the Company into a completely different league. Mine construction is fully funded and progressing according to plan. When the mine goes into production, based on a processing scenario of 1.2 million tons per year and an estimated price of USD 300/MTU for ammonium paratungstate (APT), annual EBITDA will be approximately USD 72 million. Adjacent to the Sangdong mine, Almonty also owns the molybdenum deposit. It is not currently part of the earnings calculation for the next few years. Here the complete analysis from researchanalyst.com.

    Previously, analysts at Sphene Capital had commented positively on Almonty. Despite the slight dilution due to the recent capital increase, the stock could more than double. The two-step discounted cash flow entity analysis yields a price target of CAD 1.66. Currently, Almonty's stock is trading at CAD 0.66. Click here for the complete analysis from Sphene Capital.

    Battery manufacturers like BYD want to replace cobalt with tungsten. Source: BYD Limited

    Nel: Order backlog is high, but so is the need for investment

    While Almonty shares could take off again after the capital increase, Nel was among the big daily losers yesterday. It dropped more than 5% to EUR 1.33, breaking the upward trend established since October. A capital increase caused a bad mood among investors. On Monday evening, the hydrogen specialist had placed 108 million new shares. The placement price was NOK 14.90, almost 10% below the closing price on Monday. In addition, Nel has the option to issue another 10 million new shares at the same placement price. The transaction has brought the Norwegian company an initial NOK 1.61 billion in fresh capital. The funds are to be used, among other things, to expand production capacity in Europe and the USA.

    Analysts have not yet commented on the transaction. But after the figures for Q4 and 2022, comments were rather cautious. Most recently, Goldman Sachs confirmed its "Neutral" rating with a price target of NOK 20.60. The record order backlog and the expansion of production capacity in the USA are positive factors. However, the stock has already performed very well compared to the peer group.

    Bayer: Bernstein sees significant upside potential

    Bayer shares have already gained a good 15% this year. But there is still a lot more in it. At least, this is what the analysts of Bernstein Research believe. They rate the Leverkusen-based company as "Outperform" with a target price of EUR 94. The share is currently trading at just under EUR 58. The analysts expect continued strong development of the agricultural business. This should largely compensate for the low margins in the pharmaceuticals and consumer businesses as well as the negative currency effects. Credit Suisse is much more cautious. Its price target is EUR 57. Although the analysts are quite positive about Bayer's new CEO, Bill Anderson. The Group should benefit from his experience in the pharmaceuticals business.

    In addition to the change in the Board of Management, Bayer had recently reported success in the pharmaceutical business. The prostate cancer drug Nubeqa (darolutamide) received approval from the European Medicines Agency (EMA). Prostate cancer is the most common tumour in men in Central and Western Europe. Every year, approximately 202,000 men in Europe are newly diagnosed with this tumour. In Germany, about 58,000 men are diagnosed with prostate cancer yearly. Nubeqa can now be used as part of chemotherapy to treat patients with metastatic hormone-sensitive prostate cancer. Even before its approval by the EMA, Bayer's sales of the drug had almost doubled, with revenues of EUR 466 million in 2022 - and the trend is still rising.


    After the recent capital increase, Almonty is fully financed and is increasingly becoming a takeover candidate. Break-even is not yet in sight for Nel. The order book is full, but continued high investment is needed. At Bayer, after the euphoria surrounding the change in the Board of Management and a possible split, the hype is currently somewhat deflated.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    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.

    About the author



    Related comments:

    Commented by Armin Schulz on May 21st, 2024 | 07:15 CEST

    K+S, Globex Mining, Barrick Gold - Commodity stocks: Make money now

    • Mining
    • Gold
    • Commodities
    • fertilizer

    The commodities market in 2024 is characterized by high volatility, driven by strong demand, supply bottlenecks, and technological shifts to renewable energy, which make lithium and copper, for example, more expensive. In addition, inflation concerns make precious metals attractive as a hedge against inflation, while the central banks' interest rate policy is also a factor. Geopolitical tensions further disrupt supply chains and drive up prices. In this context, investments in commodity shares are becoming increasingly important. This form of investment allows investors to benefit indirectly from price fluctuations and the increase in the value of commodities without having to physically invest in the commodities themselves. We are, therefore, looking at three commodity companies today and analyzing their potential.

    Read

    Commented by Stefan Feulner on May 21st, 2024 | 07:00 CEST

    Lynas, Almonty Industries, General Motors - Is the trade war escalating, and what is Tesla doing?

    • Mining
    • Tungsten
    • Electromobility
    • RareEarths

    The stock markets continue their record-breaking run. The Dow Jones Industrial has climbed to the 40,000-point mark for the first time in its history, and the DAX is also on the verge of breaking through the 19,000-point barrier. So far, so good, one might say. However, something is brewing in the background with regard to the trade war between the US and China, which could put enormous pressure on company margins in the future. As a result, critical commodities, in particular, are likely to be on the verge of a strong upward impulse.

    Read

    Commented by Juliane Zielonka on May 17th, 2024 | 07:00 CEST

    Almonty, Rheinmetall, Super Micro Computer - Commodity rally for defense and cloud

    • Mining
    • Tungsten
    • AI
    • Defense

    AI and defense stocks are setting the stock market on fire. Investors worldwide seem to have acquired a taste for artificial intelligence and defense. Wall Street is expecting a four-digit price target for Super Micro Computer soon. Rheinmetall is also enjoying full order books. Since the takeover of a Spanish ammunition manufacturer, production has also increased in this segment. Meanwhile, tensions between the largest economies, the USA and China, are growing enormously, which is reason enough for investors to take a look at Almonty Industries. The tungsten producer is on course for growth thanks to the restart of a mine in South Korea. Tungsten is rising in value as the increase in AI, and armaments are directly boosting demand for the rare earth metal. Who will win the stock market race?

    Read