Close menu

October 2nd, 2023 | 08:10 CEST

Rheinmetall AG, Almonty Industries, Commerzbank - A run-up to the end of the year

  • Mining
  • Tungsten
  • armaments
  • Investments
Photo credits:

After a strong first half, the stock markets corrected in the third quarter, driven by continuing risks such as high inflation, rising interest rates and the weakening economy with existing recession scenarios. The commodity markets were also unable to decouple themselves from this. Nevertheless, there are opportunities for a year-end rally in the final quarter.

time to read: 3 minutes | Author: Stefan Feulner

Table of contents:

    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

    Full interview


    Rheinmetall AG - Hanging by a thread

    The chart situation of Rheinmetall stock is still hanging in the balance. After the share price failed last week to break the short-term downtrend established in April at EUR 269.00, it has since been heading downwards on rising volumes. Overall, the loss since then amounted to around 9% at a quotation of EUR 243.90. It becomes dangerous if it falls below the current level, where the still rising 200-day line is located. In such a case, the first setback could be towards the June low at EUR 232.80.

    Analysts continue to be positive about the integrated technology group. For instance, the US investment bank Goldman Sachs reiterated its Buy rating and a target price of 319 EUR. Thus, the outlook for the second half of the year is optimistic, with the management seeing a margin potential in the mid-teens range for the Group during a Goldman Sachs conference. The private bank Berenberg also voted a "buy" rating and confirmed the price target of EUR 300 following a meeting with CEO Armin Papperger.

    The CEO was optimistic about the medium-term opportunities for the DAX member company. In the coming years, Hungary will be an important growth driver in the military sector. In addition, due to the launch of the special fund for defense spending, a record order intake would be conceivable.

    Almonty Industries - Alternative-free opportunity

    Critical commodities are also currently in correction due to further recession fears. Lithium, which is essential for battery technology, has fallen in price by around 70% since the beginning of the year, while nickel has fallen by almost 40% in the same period. Only the price of tungsten, 1 metric ton unit of tungsten corresponds to 10 kg, has been stable for around 2 years in a range between USD 300 and USD 350. The global tungsten market is mainly determined by China, which will continue to dominate both supply and consumption.

    The Chinese government's tightened regulations and restrictions on the export of tungsten ore and increased domestic demand from the manufacture of tungsten products have made China a net importer of tungsten concentrate. These factors, along with China's high growth in the automotive, aerospace, mining, and electronics industries, are also important reasons for its dominant market position.

    For shareholders of Almonty Industries, a Canadian company with a market capitalization of CAD 113.93 million, this could create a unique long-term opportunity. While production facilities in rare earths are scarce in the Western world and politicians are frantically trying to promote alternatives through high subsidies, a tungsten production facility is being built in South Korea, driven by Almonty Korea, the 100% subsidiary of Almonty Industries, which aims to be responsible for about 30% of the world's tungsten supply ex-China at full capacity.

    It is expected to be fully commissioned by the end of 2024. The Sangdong deposit has a potential life of 90 years and will expand in two phases, with annual production of 2.3 million tons to 4.8 million tons of tungsten oxide. The estimates show that the deposit has significant resources that play an important role in global supply. Germany's state-owned KfW-IPEX Bank is supporting the project with USD 75 million in financing, of which USD 40.2 million has already been drawn.

    Commerzbank AG - With momentum above the 200-day line

    The chart condition of the Commerzbank share looks much better than that of the Rheinmetall defense group. With an upward gap, the paper of the Frankfurt universal bank shot up at the end of the week by almost 12% to EUR 10.79 under large trading volume. The reasons for this were complex. Thus, the estimates for the pre-reorganization period after 2024 were increased. The returns on equity are expected to grow more strongly, and a significantly more favorable dividend policy is also to be pursued for shareholders. Instead of half, at least 70% of profits are to go to shareholders.

    The plan is to distribute EUR 3 billion to shareholders via dividends and share buybacks for the fiscal years 2022 to 2024. In addition, the Frankfurt-based bank's stated goal is to distribute more than 50% of its profit adjusted for interest payments on certain bonds and minority interests in the following years, 2025 to 2027. The bank is also pursuing ambitious profitability targets. It aims to achieve an after-tax return on equity of more than 11% by 2027.

    Based on the news, DZ Bank raised its price target to EUR 13.50 from EUR 13.20 with a buy rating. Thus, Commerzbank would have "fired the payout rocket". In addition, the raised profitability target should also. "Now, in the upcoming strategy update, the financial house must credibly demonstrate how net interest income will sustainably benefit from the interest rate turnaround," said analyst Timo Dums.

    Commerzbank AG ignites dividend rocket. Rheinmetall cannot maintain its share price level despite further orders. Development work on the main Almonty Industries project in South Korea continues to proceed according to plan.

    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 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

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

    Related comments:

    Commented by André Will-Laudien on April 18th, 2024 | 07:15 CEST

    Attention Nvidia! The turnaround check for Nel ASA, Saturn Oil + Gas, Lufthansa and TUI

    • Mining
    • Oil
    • AI
    • Travel
    • renewableenergies

    It looks like a peak is forming in Artificial Intelligence. The most prominent share here is Nvidia. With a spectacular rally, the value has surged by over 100% in just 6 months. However, the share price is now stuttering, and there have been no new highs for days. The charts for TUI and Lufthansa also show an upward reversal. The latest wage negotiations have tightened the cost structure considerably. Also, a significant amount of revenue has been lost due to the numerous strikes. And now the Middle East crisis is flaring up, making the entire region a risk for holidaymakers. However, the rise in oil prices is giving oil companies a new lease of life. Here is a list of interesting investments.


    Commented by Armin Schulz on April 17th, 2024 | 06:45 CEST

    Barrick Gold, Globex Mining, BP - Commodities In the spotlight: Supercycle started?

    • Mining
    • Gold
    • Silver
    • Commodities
    • Oil
    • Gas

    Global demand for commodities is reaching new heights, partly driven by increasing geopolitical tensions. The exchange of attacks between Iran and Israel is a case in point. This conflict, deeply rooted in religious and political differences, continues to escalate and could have far-reaching consequences for international stability and commodity markets. With this latest escalation of the Middle East conflict, security aspects in the global competition for important resources such as gold, silver and copper are taking center stage. China is demonstrating its hunger for resources. However, the price of oil has also risen recently. There has long been talk of a commodity supercycle. Perhaps it has now finally begun. Where should one invest now?


    Commented by André Will-Laudien on April 17th, 2024 | 06:30 CEST

    Discount battle over: Commodities on the counter-offensive! Rheinmetall, Power Nickel, BASF and Varta in focus

    • Mining
    • Nickel
    • Commodities
    • Gold
    • Silver
    • Defense

    Since the bombing of Israel by Iran, the clocks are ticking differently in the Middle East. The next stage of escalation has been reached. If Israel now uses the right to defense as an opportunity to initiate something bigger, it is here: the conflagration. Gold and silver are shining as safe-haven currencies and pulling long-neglected commodity shares through the roof. Now is the time to keep the sails in the wind and ride the long-awaited upward momentum. In the energy transition, strategically safer jurisdictions that can safely serve the growing hunger for commodities are still in demand. We highlight a few opportunities.