Close menu




February 29th, 2024 | 08:00 CET

Renk, Hensoldt and Desert Gold: Price gains with armaments and gold

  • Mining
  • Gold
  • armaments
Photo credits: pixabay.com

German defense stocks are currently in high demand. Rheinmetall shares have already gained 40% in the current year, while Hensoldt achieved a performance of 35% in the first two months of 2024. The figures for 2023 only dampened the mood briefly. What do analysts say about Hensoldt's share price potential? Stock market newcomer Renk still has to establish itself. But the IPO is beginning to bear fruit. Gold shares should also benefit from the global uncertainties. However, the performance of Barrick & Co. in recent years has been disappointing. Desert Gold could become the surprise stock of the year. According to experts, the explorer was the talk of the town at the recently concluded Mining INDABA trade fair in Cape Town, South Africa.

time to read: 3 minutes | Author: Fabian Lorenz
ISIN: RENK Group AG | DE000RENK730 , HENSOLDT AG INH O.N. | DE000HAG0005 , DESERT GOLD VENTURES | CA25039N4084

Table of contents:


    Desert Gold: The highlight of the trade show and soon the stock market?

    For the experts at researchanalyst.com, Desert Gold was one of the highlights at this year's Mining INDABA 2024 trade show in Cape Town. The Canadian explorer has been active in Mali since 2015 and is now entering the most exciting phase in the Company's history. With a 60% increase in gold production, Africa is the industry's hotspot. Global growth was 26%.

    With 440 km² in the Senegal-Mali Shear Zone (SMSZ), Desert Gold has a real prime piece of land. The fact that industry giants such as Barrick Gold, Endeavour Mining and B2Gold already have producing mines in the immediate vicinity shows the potential of Desert Gold. In addition, the Canadians have already identified 24 gold zones, and the number is expected to increase further with new drilling programs. Discussions are currently underway with strategic partners to finance the pre-feasibility study and mine development. Heap leach production could commence in 2025. The mining of near-surface gold may contribute to earlier cash flows. Desert Gold is considering implementing this through a joint venture.

    Desert Gold owns a prime asset in a proven gold region and is making great strides towards production. Despite this, the Company is currently valued at less than CAD 13 million. The experts at researchanalyst.com believe that, from today's perspective, the stock is unlikely to be available at a lower price, especially if the looming takeover fantasy materializes. A more detailed report can be found here.

    Hensoldt: Disappointment quickly shaken off after figures

    With an increase of around 35%, the Hensoldt share is one of the high-flyers of the year. The preliminary figures for 2023 only dampened the mood briefly last week. The Company increased its turnover to EUR 1,847 million (previous year: EUR 1,707 million). A key driver here was a significant 16% increase in sales volume in the core business. Adjusted EBITDA rose by 12.8% to EUR 329 million. Hensoldt CEO Thomas Müller stated: "*In a time of security policy uncertainty, governments and international alliances like NATO need one thing above all: a reliable partner for innovative defense and security technologies. Hensoldt is precisely that partner. We demonstrated this again in the 2023 fiscal year. Despite economic and political challenges, we significantly increased the sales volume in our core business and even exceeded the strong order intake of the previous year. *The demand for integrated defense and security solutions from Hensoldt is high worldwide and is expected to increase further given the global conflict and crisis situation."**

    At the current price level of EUR 34, however, analysts currently see no further upside potential. Warburg Research is still the most optimistic, stating that, from the analysts' perspective, the armaments boom is beginning to be reflected in the Company's figures. Following the figures for 2023, they raised the target price for the Hensoldt share from EUR 34.00 to EUR 39.50. Their rating is "Buy". Other analysts are less optimistic, with JPMorgan setting a price target of EUR 28 and Deutsche Bank seeing the fair value of Hensoldt at EUR 35.

    Renk: Thumbs up from Moody's

    Renk is the newcomer to the German stock market among defense stocks. Following the successful IPO, the Company has now reported on debt refinancing and a rating upgrade. A corporate bond with a coupon of 5.75% and a volume of EUR 520 million was redeemed before its maturity next year. A term loan from a bank consortium with a volume of EUR 525 million, which has a duration of 5 years, was used for this purpose. The debt restructuring and the IPO have positively impacted Renk's rating. The rating agency Moody's has upgraded Renk from B1 to Ba3. The outlook is "Positive" (previously "Stable").

    Renk CFO Christian Schulz stated: "*We are very pleased that we have been able to put our debt financing on a solid footing in the medium term with this competitive package. The 5-year term provides good planning security, while the extended guarantee line gives us flexibility to drive our growth forward. The rating upgrade by Moody's confirms our view that after the successful IPO, we are solidly positioned on both the equity and debt side."


    Geopolitical times are likely to remain uncertain. Defense stocks such as Hensoldt and Renk should continue to benefit from this, as Europe needs to rearm and will consider domestic manufacturers in the process. Gold also shines in times of crisis. Sooner or later, gold stocks will likely bounce back. Irrespective of the gold price, Desert Gold offers good reasons for rising prices.


    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 André Will-Laudien on October 15th, 2024 | 07:00 CEST

    After the China rally, is it now time for a gold rush? Important stock check with Alibaba, BYD, Nio, and Desert Gold

    • Mining
    • Gold
    • Electromobility
    • ecommerce

    The global stock rally is quite impressive, given the current geopolitical situation. However, only a few stocks are actually rising - around 25% of listed stocks, to be precise. The higher valuation of stocks is mainly driven by inflows into the large standard ETFs, which receive monthly inflows via a savings program. In the third quarter of 2024, global ETF assets grew by USD 390 billion, reaching a total of USD 12.4 trillion in assets under management. Stock-picking, therefore, only makes sense today if you are well-informed or possess strong analytical skills. We highlight a few investment opportunities for a handpicked portfolio.

    Read

    Commented by Juliane Zielonka on October 11th, 2024 | 07:00 CEST

    PayPal, Prismo Metals, Rheinmetall – Strategic Decisions for the Future

    • Mining
    • Copper
    • Commodities
    • Defense
    • Software

    Three companies are setting the course for further growth: PayPal is opening up a new business segment in the US and launching the "PayPal Ads" advertising network to use transaction data for retail media. This move could increase the Company's clout. Meanwhile, the demand for copper is rapidly picking up speed. Prismo Metals is therefore intensifying its exploration activities, particularly at the Palos Verdes project in Mexico, in order to benefit from the increasing demand. Rheinmetall has received an order from the US Army to develop unmanned ground vehicles for the S-MET program, strengthening the Company's position in autonomous military vehicles.

    Read

    Commented by Fabian Lorenz on October 10th, 2024 | 07:00 CEST

    50% profit margin? JinkoSolar, Nel ASA, and Desert Gold shares

    • Mining
    • Gold
    • renewableenergies
    • Solar

    A 50% profit margin? This is the prospect held out by the CEO of Desert Gold Ventures. The gold explorer aims to start production as early as next year. Even if the price of gold were to fall significantly, Desert would still be profitable. Or is a takeover perhaps on the cards? Unfortunately, Nel can only dream of such profit margins. The hydrogen specialist failed to establish a profitable business model during the boom phase. Now, orders are also drying up, and analysts are reducing the share price targets. And what is JinkoSolar doing? The Chinese company seems to be emerging as a winner from the solar crisis. However, even the market leader is feeling the effects of falling prices. Nevertheless, the share price has risen. Where is it worth entering?

    Read