Rheinmetall & Hensoldt disappoint! The real WINNERS of the DEFENSE BOOM: Alzchem and Almonty!

Almonty: Will the stock make noise again after the quiet period?

With its long-awaited NASDAQ listing in July, Almonty Industries' share price rally reached a temporary peak. The recent setback offers investors the chance to "reload." The investment story is likely to continue for some time to come. The quiet period is coming to an end, and the chances of prices rising again are excellent. In any case, analysts foresee significantly increasing revenues and profits for the coming years.

D.A. Davidson projects Almonty's revenue to reach CAD 120 million in the coming year. By 2028, this figure is expected to reach CAD 420 million. EBITDA is forecasted to grow from CAD 70.8 million in 2026 to CAD 261.3 million in 2028, while net income should increase from CAD 66.6 million to CAD 213.2 million. Defense companies such as Renk and Co. can only dream of such margins. Therefore, analysts highlight significant revaluation potential for the Company.

Analysts in Germany also expect Almonty's revenues to rise sharply and margins to be fantastic. GBC Research sees Almonty's revenue at CAD 154 million in 2026 and already at CAD 315 million in the following year. EBITDA is expected to climb from CAD 106 million in 2026 to CAD 222 million in 2027, and net income from CAD 93 million to CAD 212 million. Accordingly, analysts recommend buying Almonty shares with a price target of EUR 5.28.

Incidentally, analysts at B. Riley see the fair value of Almonty shares at USD 6, while their colleagues at Alliance Global Partners put it at USD 6.75.

Background: Tungsten is a critical metal, with 80% of global production coming from China. The Chinese government increasingly uses its dominance over tungsten as a geopolitical tool, since tungsten is extremely hard and indispensable for defense, technology, and other industries. Almonty already produces tungsten at a mine in Portugal. In recent years, the Company has developed the Sangdong mine in South Korea, which is scheduled to open later this year, making Almonty the largest tungsten producer in the Western world. Additionally, significant molybdenum deposits have been discovered in the Sangdong area and are planned for future extraction.

Almonty shares are currently trading at EUR 3.47, well below their high of around EUR 5 at the beginning of July. It should not be forgotten that the share price was only at EUR 1 at the start of the year. A breather is therefore healthy. However, a quick return to the high for the year would come as no surprise.

Alzchem: Analysts divided

While Almonty does not "yet" have any strategic shareholders from the ranks of defense companies or governments, this is now different for MP Materials and Alzchem, for example. The US government acquired a stake in MP Materials in July. Last week, it was reported that the Czech defense company, Czechoslovak Group, had acquired a 9.2% stake in the specialty chemicals group Alzchem. The Czechs were apparently not deterred by the 150% rise in the share price this year. Alzchem is one of the leading producers of nitroguanidine, an important precursor for the manufacture of explosives.

Analysts have recently given Alzchem mixed ratings. Berenberg is among the bulls. After the quarterly figures were published, analysts raised their target price from EUR 145 to EUR 185. Estimates for the coming years were raised, and the "Buy" recommendation was reaffirmed.

In contrast, Montega currently sees Alzchem shares as a "Hold". The SDAX company would impress with strong margin expansion. Progress is also being made on the necessary capacity expansion in Germany, and the search for a location in the US is expected to be completed in 2026. However, the share has already performed strongly and reached the analysts' fair value of EUR 140.

Rheinmetall & Hensoldt: Waiting for the super cycle

German defense companies experienced a slight setback last week. The defense boom and super cycle are not yet clearly visible in the latest figures.

Hensoldt initially reported a moderate increase in revenue from EUR 849 million to EUR 944 million in the first half of 2025. Adjusted EBITDA rose slightly from EUR 103 million to EUR 107 million, though the margin fell from 12.2% to 11.3%. The order intake is likely even more important at present. But here, too, the radar specialist failed to impress. The order volume rose only slightly from EUR 1.359 billion to EUR 1.405 billion.

Rheinmetall's figures were eagerly awaited last week. And Germany's largest defense contractor also failed to impress.

Consolidated revenue climbed noticeably in the first half of 2025 compared with the same period last year, up 24% to EUR 4.735 billion. Operating profit rose by 18% to EUR 404 million. Basic earnings per share from continuing operations improved from EUR 4.21 to EUR 5.02 in the reporting period. The capital-intensive nature of the defense industry was reflected in the operating free cash flow from continuing operations, which fell significantly from EUR -19 million to EUR -644 million. The decline was mainly due to the increase in cash-effective investments, primarily for the construction of new plants and capacity expansion at existing sites, as well as order-related inventory build-up.

In terms of order backlog as of June 30, 2025, Rheinmetall reported a significant year-over-year increase from EUR 49 billion to EUR 63 billion. However, as of March 31, 2025, the figure stood at EUR 62.6 billion, indicating that order intake in the defense sector is currently stagnating.

Almonty shares currently offer an exciting opportunity to get in or add to your portfolio. Analysts believe the stock has significant upside potential, and the opening of the Sangdong mine is the next highlight on the horizon. Tungsten itself is also likely to remain in the headlines. While Almonty has already completed its consolidation phase, this may still lie ahead for Alzchem, Rheinmetall, and Hensoldt. For the defense companies, it will be crucial that more concrete orders are finally placed in the second half of the year.