Perfect signals: Take advantage of setbacks at Almonty Industries, Rheinmetall, and Steyr!

Almonty Industries – Strong tungsten player

With the planned commissioning of the Sangdong mine in South Korea, the West is finally gaining a long-awaited counterbalance to the tungsten market dominated by China, North Korea, and Russia. This strategic metal is indispensable in defense, aviation, and high-tech applications due to its exceptional hardness and heat resistance. Supply concentration and export controls have long been a concern for Western industries.

At full production capacity, the Sangdong mine is expected to account for more than 80% of Western non-Chinese tungsten production. Long-term offtake agreements with attractive price floors are already in place. Almonty also sets itself apart with its many years of operational expertise and modern processing facilities. The Company has been producing tungsten in Portugal for decades and will further expand its output of high-grade material in the near term. In terms of equipment and process efficiency, management estimates that Almonty's facilities are more than a decade ahead of typical Chinese operations.

With the recent acquisition of the Gentung Browns Lake tungsten project in the United States, Almonty is better positioning itself in this strategically important market. The project is located in a historic tungsten region that once supplied the strategic reserves of the United States. Gentung Browns Lake could go into production as early as the second half of 2026. If the old mine design is retained, 140,000 tons could be produced annually.

Almonty is investing around USD 9.75 million on the acquisition. Although the Company has a comfortable cash cushion, it has already secured additional financing options to ensure rapid access to capital if required. CEO Lewis Black is also a major shareholder, giving investors confidence that future decisions will focus squarely on creating long-term shareholder value.

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Rheinmetall – High medium-term targets provide only a short-term boost

The German defense contractor recently published its medium-term forecasts. However, investors celebrated the new, high bar only briefly. The share price is consolidating at a high level in the EUR 1,700 range, around 20% below the all-time high reached in the fall. The majority of analysts continue to rate the share as a "Buy". Experts at Deutsche Bank and JPMorgan recently confirmed their price targets of EUR 2,100 and EUR 2,250, respectively. Market participants are eagerly awaiting further order intake in the current final quarter.

The current management forecast for the current year is for revenue growth of "at least" 25-30% and an operating margin of 15.5%. In the previous year, Rheinmetall generated revenue of just under EUR 10 billion with an operating margin of 15.2%. The new medium-term target now envisages an increase in revenue to around EUR 50 billion with an operating margin of at least 20%. These are substantial increases – both in terms of revenue and profit margin.

This outlook is solidly underpinned by a sharp rise in defense spending in Europe. This trend creates a good basis for growth, and the group is also steadily expanding its business activities through new business areas, partnerships, and acquisitions. Recent highlights in this regard include the purchase of the military division NVL from German shipbuilder Lürssen and the cooperation with Lockheed Martin in the field of rocket technology.

Steyr – Profit warning

The most recently published quarterly figures for the third quarter already hinted at a profit warning. Now the Company has officially announced it. The outlook had previously been for a sales increase of at least 40% and an EBIT margin of over 20%. Delays in order intake have now prompted Steyr to backtrack, and the share price has temporarily fallen below EUR 40.

The adjusted targets for the current fiscal year include a 15-25% increase in revenue to EUR 48 to 52 million and a significantly lower EBIT margin of 13-16%. The margin pressure results from the costs of setting up production, which are currently offset by lower revenue.

At the same time, Steyr is reaffirming its mid-term forecast for the 2027 fiscal year. The Company aims to generate revenue of around EUR 140 million and EBIT of approximately EUR 40 million by then - the order backlog of over EUR 300 million supports this scenario. The stock could receive a boost in the coming months if major shareholder Mutares sells its remaining stake. The investment company has already sold part of its stake this year and plans to exit completely. With a very high free float, Steyr is emerging as a takeover candidate for Rheinmetall & Co..

Strong demand trends are an attractive basis for new investments. Almonty Industries is particularly well positioned: as the future largest non-Chinese tungsten producer, the Company will play a key role in a market of strategic importance and is currently rated a clear "Buy" by analysts. Defense stocks such as Rheinmetall and Steyr are also benefiting from rising defense budgets. In addition, Steyr could emerge as a potential takeover target as early as next year.