New analyst comments: Almonty Industries at all-time high, volatility at Rheinmetall and RENK – What is next?

Almonty Industries – New all-time high, net margins of 60% in the medium term

Critical raw materials and rare earths are at the center of strategic interests for governments and states. This development, which many experts believe is only just beginning, will shape the reality of the industry in the future. Governments and states will become the most important investor group in the future and are prepared to pay high, strategically motivated prices for security of supply. The US announcement that it will create a strategic reserve for rare earths and other critical raw materials to support the national technology industry reflects this logic.

These conditions and the associated potential for value appreciation particularly favor Almonty Industries, as the company owns an asset with geopolitical significance in the form of the tungsten mine in Sangdong, South Korea. With production ramping up in South Korea, the prospect of production starting in the US in the second half of the year, and existing production in Portugal, the company could account for up to 40% of non-Chinese supply, according to company and analyst estimates. Due to its unique properties, tungsten is an essential raw material for several industries, especially the defense sector.

The stock is currently sprinting from one all-time high to the next. On the Nasdaq main exchange, the shares recently closed at USD 14.10, valuing Almonty Industries at just under USD 4 billion. In their latest study, analysts at Sphene Capital highlight how strongly the combination of high tungsten prices and rising production is acting as a profit lever.

In the first quarter of last year, the average price of tungsten was still around USD 350 per MTU, but it recently reached USD 1,250 per MTU. For the current year, the experts at Sphene Capital forecast revenue of around CAD 200 million, which is expected to more than double to around CAD 530 million in the following year. According to the analysts, earnings growth is likely to be even more dynamic. Profit is projected to increase sharply from around CAD 68 million in 2026 to approximately CAD 263 million in 2027. This means that Almonty could soon achieve a net margin of around 50% – a phenomenal level.

Even more impressive is the medium-term profitability outlook. From 2028 onwards, analysts expect annual revenues of around CAD 1 billion, with net margins rising further to approximately 60%.

The key question, therefore, is how the market will value a company that is expected to operate in a sustained high-price environment for tungsten and generate annual net profits in excess of CAD 600 million (approximately USD 450 million). Based on current analyst estimates for 2028, Almonty is valued at roughly nine times projected earnings. Given the strategic importance and geopolitical relevance of its assets, a higher valuation multiple could be justified over the medium term.

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Those who would like to learn more about the prospects of Almonty Industries firsthand should register for the upcoming virtual International Investment Forum (ii-forum.com) on February 25, 2026. CEO Lewis Black will be presenting live.

Rheinmetall – JPMorgan becomes somewhat more cautious

Sentiment for defense stocks rises and falls with the level of geopolitical tensions and the potential end of the war between Russia and Ukraine. The second round of US-mediated talks between the warring parties in Abu Dhabi recently ended, which the US described as detailed and productive, resulting in, among other things, a prisoner exchange that has already been carried out.

Most recently, the share price, which stood at around EUR 1,600 at the end of the week, was weighed down by analyst comments from JPMorgan. The experts are now somewhat more skeptical about the future of the German defense contractor and expect the production ramp-up to be more difficult than previously assumed through 2030. As a result, the experts have lowered their earnings estimates.

On average, analysts are forecasting a target price of EUR 2,150, which corresponds to an upside of over 30%. In November, the group specified its medium-term guidance with a revenue target of around EUR 50 billion and operating margins of more than 20% in 2030.

RENK – Analysts expect outperformance

RENK shares have been volatile since the beginning of the year. The all-time high was reached last fall at prices around EUR 90. The shares are currently trading at a price of EUR 55, giving the company a market capitalization of EUR 5.5 billion. Most recently, an analyst comment from investment bank Exane BNP Paribas provided a boost. The experts rated the stock as "Outperform" but lowered the price target to EUR 65. RENK's earnings growth was almost twice as strong as the industry average. The research firm Jefferies, on the other hand, is more bullish with a price target of EUR 75 and rates the stock as a "Top Pick."

The drive technology specialist is benefiting primarily from high demand from the defense sector. Gearboxes and drive systems for tanks and tracked vehicles are in high demand. Demand from the marine, shipbuilding, and other industries is equally solid. In general, the Germans have a first-class competitive position, which forms the basis for growth and high margins.

Things could hardly be better for Almonty. With high tungsten prices, the ramp-up in production is likely to lead to buoyant profits, as current analyst studies show. The geopolitical weight of tungsten assets will continue to increase. The US initiative to build up a strategic reserve of rare earths and other critical raw materials highlights the massive change from which the company will benefit. The big picture is positive for defense sector stocks. Nevertheless, volatility has increased recently. Analysts continue to attest to Rheinmetall and RENK's solid upside potential.