Close menu




March 23rd, 2022 | 12:01 CET

Rheinmetall, Kleos Space, Lufthansa - Which shares benefit from the war-related supply chain problems?

  • Space
  • travel
Photo credits: pixabay.com

Supply chain problems began in earnest with Corona, and just when it seemed the situation was returning to normal, the Ukraine conflict started. We are already seeing the effects in the supermarket today. Once again, no toilet paper, and you also have to be lucky with cooking oil, pasta and flour. But the industry is also suffering, with the automotive, pharmaceutical and chemical sectors being particularly affected. It is not only due to a lack of materials but also to longer transport routes, as Russia, for its part, has closed its airspace to foreign machinery. Imports from China thus have a longer route - the only alternative remains shipping, which in turn is significantly slower.

time to read: 4 minutes | Author: Armin Schulz
ISIN: RHEINMETALL AG | DE0007030009 , KLEOS SPACE CDI/1/1 | AU0000015588 , LUFTHANSA AG VNA O.N. | DE0008232125

Table of contents:


    Rheinmetall - Stock performs very strongly

    Since Germany imports a lot of metals and coal from Russia, Rheinmetall could also be indirectly affected by supply chain problems. Because if the steel industry cannot supply enough material, which is likely to become more expensive anyway due to high energy costs, there will be production difficulties in the long term. CEO Armin Papperger said in an interview with Wirtschaftswoche: "What the German armed forces needs now is not ready in the industry's warehouses." However, the Düsseldorf-based Company does not currently seem to have a raw material problem, as it says it could supply equipment worth EUR 42 billion.

    It is thus clear that the defense group will be one of the big beneficiaries when it comes to distributing the 100 billion in special assets of the German armed forces. In addition, the government will increase defense spending to over 2% in the coming years to make the German armed forces fit for defense again. The Düsseldorf-based Company can be hopeful that sales figures will rise in the coming years. In 2021, the Group had not been able to meet analyst expectations in terms of sales. If you want to read a more detailed analysis of the Group, we recommend the report on researchanalyst.com.

    The Düsseldorf-based Company's shares are still selling like hotcakes, and the stock is rushing from one high to the next. The trend is also fueled by analysts' ever-higher price targets. Bank of America is in the lead with a target price of EUR 220, followed by Warburg Research with EUR 210. UBS and Deutsche Bank call for EUR 187 and EUR 190, respectively. At its peak, the share has almost doubled since the beginning of the war. It is currently trading at EUR 180.80. As an interested investor, you should wait for a setback.

    Kleos Space - Target price EUR 1.75

    Sending goods by air freight is only economical in certain situations. The railroad line from China to Europe is at a standstill as it crosses Russian territory. So in many cases, the only option is by sea. However, there are still pirates on the way to Europe. It is here where Kleos Space comes in. The Company uses satellites in space to intercept radio frequencies and can use the data it collects to track the movements of ships. Customers can use this data to detect pirates, illegal fishing, smuggling, and border crossings, thus warding off these threats. Meanwhile, the Company also offers a ground solution.

    On March 11, First Berlin Equity Research issued a report on the Company. If the assumptions hold true, 2022 will be the Company's breakthrough year. After total sales in 2021 amounted to only EUR 125,000, almost EUR 8.2 million are targeted for 2022. On the one hand, this is due to satellite cluster expansions, which will double to 16 by mid-2022, raising global coverage by 119 million sq km daily. More data means more accuracy, making the products increasingly attractive to governments and other customers. On the other hand, the Ukraine conflict and 52 evaluation contracts that were already available in 2021 but could not be started until 2022 will help. According to analysts' estimates, sales in the first quarter will amount to EUR 335,000. That would represent more than 2.5 times the full-year 2021 revenue.

    The partnership with Satellogic should also provide better customer access, as the Company offers high-resolution satellite imagery. Together, therefore, there are great synergy effects. First Berlin has set the stock at buy with a price target of EUR 1.75. The share is currently trading at just EUR 0.342. That is due to a slide in the share price caused by the postponed launch of the third cluster. It was initially planned for January and is now rescheduled for April. No later than with the new clusters the business can take off.

    Lufthansa - What does Kühne want?

    During Corona, passenger air traffic virtually collapsed. Lufthansa, of course, felt the impact. The supply chain difficulties made visible by Corona, in contrast, helped the Company's cargo business. The record year for the cargo division in 2021 enabled the Group to cut its loss by two-thirds to EUR 2.2 billion. Although the Corona restrictions will be eliminated, the management only expects a passenger volume of 70% compared to the pre-Corona period. CFO Remco Steenbergen also refused to give a clear profit target.

    In contrast, Klaus-Michael Kühne, has made a decision. He has bought into Lufthansa with EUR 350 million, making him Lufthansa's largest shareholder alongside the German government. Since then, there have been rumors about a possible split of the Group into the passenger and cargo divisions. For Kühne, the move makes sense because he owns a stake in the shipping sector with Hapag Lloyd. His own logistics company, Kühne & Nagel, covers the road sector. Aviation is still missing. It remains to be seen precisely what Kühne's plan will look like.

    Analysts are also undecided. In March, there was one buy and one sell recommendation. Four analysts recommended holding. The price targets are between EUR 5.20 and EUR 8.30. Since March 7, the share has risen like a Phoenix from the ashes. From EUR 5.25 it went up to EUR 7.33, a plus of almost 40%. The share is currently very volatile. Here, too, one should wait for consolidation before entering, especially since no upward trend has been formed yet.


    Supply chains will continue to be disrupted. If imports from China by air are not economical, the only option currently available is by sea. Rheinmetall does not seem to have any major supply problems for the time being. Kleos Space offers cargo ships protection against pirates, so large shipping companies or insurance companies could become customers. Lufthansa set a record in the cargo segment in 2021. This segment, at least, is sure to boom this year too.


    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

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author



    Related comments:

    Commented by Fabian Lorenz on May 31st, 2023 | 08:00 CEST

    Up to 200% price potential: TUI, BYD, Shell, Saturn Oil + Gas

    • Mining
    • Oil
    • Electromobility
    • travel

    Low oil price? Impending recession? Nothing seems to be able to touch star investor Warren Buffett's love of oil stocks. On the contrary, Berkshire Hathaway has added to its holdings in Occidental Petroleum in recent weeks, increasing its stake to 24.9%. Analysts also recommend Shell. However, they are calling for a higher dividend, among other things. Investors can soon look forward to a massive dividend from Saturn Oil & Gas. In Q1, Saturn was not only the fastest-growing oil producer in Canada, but analysts also see a share price potential of almost 200%. While TUI is calming down after a turbulent capital increase, analysts continue to issue warnings. BYD's stock remains in a sideways trend. Will success in Indonesia bring about a turning point? Elon Musk, in any case, expresses positive views about the competitor.

    Read

    Commented by Fabian Lorenz on May 25th, 2023 | 07:40 CEST

    Caution with TUI and Varta! Smartbroker Holding with 85% price potential!

    • Investments
    • travel
    • renewableenergies
    • Batteries

    At around EUR 6, the TUI share is trading at an all-time low. Is now the time to buy into the tourism group? One analyst warns against it and believes the share price could fall by a third. Caution is also advised with Varta. The former German battery hopeful is fighting for survival. Analysts halve the price target and recommend selling the share. And the shareholders' association SdK is also sounding the alarm. A total loss cannot be ruled out. Instead of catching a falling knife, focusing on shares in an upward trend, such as Smartbroker Holding, is worthwhile. The share is one of the current year's high flyers, and analysts believe further price increases of over 80% are possible. Thanks to the new app, EBITDA could increase more than tenfold.

    Read

    Commented by Armin Schulz on May 24th, 2023 | 07:40 CEST

    TUI, Manuka Resources, PayPal - Which turnaround candidate has the most potential?

    • Mining
    • Vanadium
    • travel
    • Software

    Currently, the focus is on whether the US can reach an agreement in the debt dispute. If this does not succeed, there is the threat of a default that could shake the markets. This could push the gold price further up, which has already benefited from the banking crisis. But regardless of these uncertainties, some stocks are waiting for their turnaround. Shares such as MorphoSys and TeamViewer have already achieved it and, in some cases, more than doubled in value within a very short time. We have picked out three companies that also have this potential.

    Read