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

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.

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.