Plug Power Losing Hope? Renk Stuck in a Downtrend? RE Royalties Riding the AI Boom!

RE Royalties: Positive Outlook

RE Royalties aims to benefit from the growing global capital requirements for renewable energy. The Canadian company applies a financing model familiar from the mining sector to the energy industry. Project developers receive short-term loans, while RE Royalties secures long-term income in the form of royalties in return. Once the loans have been repaid, the capital is reinvested. In the latest interview with Lyndsay Malchuk from IIF, RE Royalties manager Talia Beckett is optimistic about the future. Renewable energy expansion is no longer driven solely by climate targets. Amid geopolitical uncertainty, energy security is becoming increasingly important. Countries want to reduce their dependence on external energy suppliers and are investing more heavily in their own energy supply. In Beckett's assessment, this creates significant long-term growth opportunities for the industry and the relevant financing providers.

RE Royalties has now financed projects worth around USD 100 million and has a portfolio of more than 120 royalties. These include the energy supply for a hospital in the Maldives and solar installations at Mexican holiday resorts. A large proportion of the financed projects are already operational and generate ongoing income. Beckett sees particularly strong growth potential in expanding existing customer relationships. One example is Solaris Energy. RE Royalties has already invested USD 4.8 million in a portfolio of 16 solar projects. The two companies have now signed a non-binding letter of intent (LOI) for a potential financing partnership worth up to USD 67.5 million. The collaboration could thus reach an entirely new scale. According to Beckett, RE Royalties has an extensive pipeline of potential financing clients. There is no shortage of attractive investment opportunities.

RE Royalties' decisive growth factor is therefore access to additional capital. In Beckett's view, government funds are nowhere near sufficient to finance the planned renewable energy projects worldwide. Private investors will have to close a substantial portion of this financing gap. RE Royalties aims to capitalise on this trend and is using its own green bonds, among other instruments, to raise capital for further investments. The stock could benefit from this strategy as well.

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RENK: Downtrend with No End in Sight

Renk shares have been falling for over a year. The decline over the past four weeks stands at 18%, over the past six months at 33% and over the past 12 months at 54%. It does not help that, according to marketscreener.com, 13 of 16 analysts recommend buying the shares. The average price target is EUR 61.79. Last week, Jefferies reiterated its Buy recommendation with a price target of EUR 60. Yet nothing currently appears to be driving the share price. Yesterday, Renk shares traded just above EUR 34 and appear to have EUR 30 firmly in their sights.

There is currently no sign of any spectacular orders either. Most recently, Renk received a follow-up order worth EUR 30 million from Finnish defence group Patria. Further HSWL 076 transmissions will be supplied for the new TRACKX vehicle family. Patria had already ordered an initial pre-series delivery from Renk in early 2026. The new order is considerably larger and is scheduled to begin delivery in 2027. This comes as series production of the TRACKX platform is set to begin. Finland and Sweden initiated the procurement of the first vehicles at the end of September. Deliveries are also scheduled to begin in 2027. For Renk, this means continuing the collaboration with Patria, which began during the development and testing phase.

The HSWL 076, weighing around 700 kg, was developed specifically for light tracked vehicles of between 10 and 20 tonnes. It combines drive, steering and braking functions and, thanks to its digital architecture, also supports remote control and, in future, autonomous driving functions. Renk is already working with Patria on corresponding applications. At the Eurosatory 2026 defence exhibition, the partners presented a concept for a heavy unmanned ground vehicle (UGV). The combination of the modular TRACKX platform and Renk's drive-by-wire technology is intended for use in various vehicle programmes in future. This could enable Renk to position itself in the growing market for unmanned land systems alongside conventional military vehicles. However, these prospects alone are not enough to drive Renk's shares higher.

Plug Power Wants to Take to the Skies

As with Renk, the downtrend at Plug Power seems to have no end in sight. However, the problems are different. At Renk, the question is whether the defence boom will last long enough to justify its market capitalisation of EUR 3.4 billion; at Plug Power, the question is survival. This is because the US company has so far been unable to develop a profitable business model.

The latest partnership is unlikely to change this either. Plug Power and Arcadia eFuels want to cooperate on expanding the production of synthetic aviation fuels (e-SAF). The initial focus is on the ENDOR project in the Danish port of Vordingborg. Plug Power is to supply electrolysers with a total capacity of 280 MW for this project. Electricity from renewable sources is to be used to produce around 110 tonnes of green hydrogen daily in future. Arcadia eFuels intends to then process this with captured CO₂ into synthetic kerosene. This is intended to enable the refuelling of conventional aircraft. However, the investment decision is not yet final. Delivery of the electrolysers is to begin once the project has been approved. Beyond ENDOR, the agreement provides for Plug Power potentially being selected as the preferred supplier for four further projects in Europe and the Americas with a potential electrolysis capacity totalling more than 1 GW.

The EU requires airlines or fuel suppliers to use an increasing share of sustainable aviation fuels. From 2030, minimum quotas for synthetic fuels will also apply. This is likely to increase demand for green hydrogen for the production of e-SAF. Plug Power already sees Europe as its most active market for electrolysers and is working on several large-scale projects with a total capacity in the gigawatt range.

Conclusion

Renk's valuation has become more reasonable following the recent sell-off. However, with the entire defence sector lacking momentum, the stock is still not an obvious buy. Plug Power, too, is likely to appeal only to highly speculative investors. RE Royalties, by contrast, has an interesting business model. If the company succeeds in converting its project pipeline into financing opportunities, its shares could benefit as well.