Rheinmetall, Almonty Industries, RENK: The next wave of the defense stock mega boom is rolling in

Rheinmetall – Strategically expanding its naval business

Rheinmetall is driving forward consolidation in the European defense sector. The Düsseldorf-based group has reached an agreement to acquire Naval Vessels Lürssen (NVL). The formal completion of the transaction, which is subject to the usual antitrust conditions, is expected soon. With the takeover, which is to be completed in early 2026, Rheinmetall is entering the naval shipbuilding sector and significantly expanding its portfolio. This is a logical step toward strengthening its position as a systemically important supplier in Europe.

At the same time, the Company's subsidiary American Rheinmetall is strengthening its presence in the US. With an investment of over USD 30 million, the Company is consolidating its activities in Michigan in a modern production facility. This expansion will not only create hundreds of new jobs but is also intended to strengthen local supply chains. The capacities will support important US defense programs, such as the XM30 combat vehicle program, and underscore the Company's commitment to the key US market.

The acquisition of NVL not only brings Rheinmetall new shipyards and over 2,000 employees, but also valuable expertise in the construction and maintenance of naval vessels. This results in interesting synergies, especially with its own vehicle division. The existing capacities and heavy infrastructure can be used to relieve production and scale up without significant additional investments. In the long term, Rheinmetall aims to establish itself as an integrated supplier of complete naval systems. The share price is approaching the EUR 2,000 mark and currently stands at EUR 1,960.00.

Almonty Industries – Benefiting from the defense boom

Almonty Industries is gaining momentum in the wake of the defense boom. With its clear focus on tungsten, the mining company has placed itself in a unique strategic position that is now bearing fruit. Its flagship project, the Sangdong mine in South Korea, is about to go into operation, marking the start of a significant growth phase. The recently successful Nasdaq listing brought in USD 90 million in fresh capital, providing the necessary fuel for ambitious plans such as the tungsten oxide plant and underscoring the growing interest among investors.

The market outlook for tungsten could hardly be better. Geopolitical tensions and Chinese export restrictions have dramatically increased demand for conflict-free sources and provided sustained support for prices. Almonty is benefiting from its clever geographical diversification and long-term off-take agreements with attractive minimum price guarantees. From 2027, new US import regulations for defense goods will further exacerbate the situation, providing sustained tailwinds for independent suppliers outside China and securing fundamental demand in the long term. In recent months, the price of tungsten has climbed from USD 300 to over USD 500.

The Company's operational transformation is already in full swing. With the planned ramp-up of Sangdong later this year and the already confirmed capacity doubling by 2027, Almonty is increasingly positioning itself as an indispensable strategic partner for Western high-tech and defense industries. Based on this, analysts are forecasting a massive increase in revenue and profitability in the coming years. The price targets range up to USD 7. The course for a successful and profitable future has thus been more than just set. The share is currently trading at USD 4.81.

RENK Group – Transmission specialist gears up for sustained demand

Augsburg-based drive specialist RENK is fundamentally restructuring its production. Instead of focusing purely on manufacturing, the Company is now relying on a modular production concept based on the efficient processes used in the automotive industry. Standardized workstations and optimized material flows are expected to significantly increase capacity. The goal is to produce more than 1,000 transmission units per year in the future, up from just a few hundred previously. This strategic realignment is a direct response to the tense geopolitical situation, which requires faster delivery of defense technology. The completely new production setup shows how serious the Company is about its growth agenda.

This is no surprise, given that the Company's order book stood at a whopping EUR 5.9 billion in the middle of the year. This growth is primarily driven by continued robust demand for defense equipment. The range of drive solutions extends from tracked and wheeled vehicles to marine applications and power generation. RENK is targeting revenue of over EUR 1.3 billion for the coming year. Operating profit is expected to reach up to EUR 235 million.

Over the next few years, the Company will invest around EUR 0.5 billion in research and capacity expansion in order to meet rising demand in the long term. A key project in this regard is modular transmissions that can be used in various tank platforms. This flexibility shortens delivery times and strengthens RENK's role as a key supplier to NATO forces. The share is currently available for EUR 72.03.

The ongoing defense boom is creating an exceptional growth environment for specialized stocks. Rheinmetall is strategically strengthening its role as a systemically important European full-service provider for naval systems through the acquisition of NVL. Almonty Industries will fundamentally benefit in the future as a mining operator with its tungsten production in South Korea from the search for conflict-free raw material sources outside China. RENK, in turn, is securing its key role as a high-performance supplier to NATO through massive investments in modular production capacities.