Saxony-Anhalt, Leipzig, NATO and Gold – Here We Go! Rheinmetall, Renk, DRC Gold and CSG Take Center Stage

Rheinmetall and Renk: Price Corrections Despite a Flood of Orders

First sky-high, then nothing but a downward spiral! Although Rheinmetall and Renk's order books are bursting at the seams, German defence stocks are currently experiencing noticeable price corrections on the stock market. A key reason is that, according to market reports in Handelsblatt, the sector is normalizing after an extreme rally, as much of the positive news was already priced in. Furthermore, recent reports of operational delivery delays and specific quality defects are undermining investor confidence in the companies' actual ability to deliver. The immense capital requirements for the necessary expansion of production capacity are also putting short-term pressure on margins and profitability. Adding to this are political uncertainties and unexpected cancellations of major projects, such as the Ministry of Defence's withdrawal of planned contracts.

Leading financial institutions have also downgraded their outlook for the European defence sector and are warning of a waning momentum effect. Concerns are growing in the market about a so-called "peak ammunition" risk, should global demand for ammunition have already passed its peak. At the same time, geopolitical speculation about potential diplomatic rapprochements is driving capital away from defence stocks and into other industrial sectors. Many investors are therefore deliberately taking advantage of the changed sentiment to take profits and secure their substantial returns from previous years. However, following the latest corrections, analysts on the LSEG Refinitiv platform are once again signalling that now is the time to buy. For Rheinmetall, the 12-month consensus even suggests a target price of EUR 1,669 (up 60%), while the Augsburg-based gearbox specialist Renk is equally highly rated at EUR 66 (up 50%). So what is the decisive factor – the current price pressure or the 12-month outlook? Flip a coin!

CSG NV: Sharply Corrected and Now Rising Like a Phoenix

In mid-January, CSG NV launched its IPO at EUR 25. In the first few days, the price even rose to just under EUR 35, after which the CSG share price suffered a sharp sell-off. This followed a short-seller report by Hunterbrook Media, after which the share price at times fell by more than half from its all-time high. However, many signs now suggest the unsettling insider selling and speculative headwinds have largely run their course, as major strategic shareholders, such as the owner family, are demonstrably staying on board and the market has largely digested the allegations. The three most recent company announcements underline this comeback. First, the appointment of experienced defence industry executive Ben Hudson as Vice-Chairman reinforces the company's professionalization and international focus. Second, new contracts worth over EUR 150 million for multi-purpose tactical vehicles with Poland's Huta Stalowa Wola signal continued confidence from NATO partners. Third, the strong presence of subsidiaries such as Tatra at the MSPO 2026 trade fair shows the group is fully focused on operational expansion. This recovery is underpinned by outstanding first-half 2026 figures, which show a 17.2% jump in turnover to EUR 3.25 billion and EBIT of EUR 784 million. The order book of EUR 46 billion is particularly bullish and, together with the forecast release of EUR 1.5 billion in working capital in the second half of the year, underpins the group's financial strength. Given this fundamental strength and a valuation that is favourable by industry standards, analysts on the LSEG Refinitiv platform currently see significant upside potential for the share price to over EUR 27. Exciting!

DRC Gold: The Kilo-Moto Gold Leverage is Taking Shape

Investors looking to stabilize their portfolio should also consider gold investments. DRC Gold, a specialist in East Africa, is currently significantly refining its strategy and is entering a new phase with the Giro Gold project, as the option agreement signed in August replaces the previous letters of intent and, for the first time, establishes a detailed contractual framework for the acquisition of a stake in Giro Goldfields. At the heart of the deal is an initial 55% stake, which DRC Gold can acquire by issuing an initial 25 million shares, followed by a further 325 million shares, subject to the necessary shareholder and stock exchange approvals. The scale of the Giro project is particularly attractive: 497 km² within the Kilo-Moto greenstone belt in the north-east of the Democratic Republic of the Congo and only around 35 km west of the Kibali mine, which produces more than 600,000 ounces of gold annually. Proximity to Kibali does not guarantee a commercially viable discovery, but it significantly increases the project's strategic appeal, as Giro sits within the same regional geological setting and exhibits similar structural mineralization patterns.

However, the most important valuation argument continues to be provided by Kebigada, with a historical JORC 2012 resource of 123.7 million tonnes at 1.03 g/t gold, or 4.1 million ounces of gold, of which 2.44 million ounces are in the indicated category and 1.67 million ounces in the inferred category. The key factor, however, is the classification: this resource is based on 243 drill holes totalling 29,358 m, has been modelled to a depth of around 300 m below surface, and is expressly not considered a current mineral resource; rather, it must be updated through further drilling, data verification and quality assurance. This also represents the next major driver for the share price, as converting the historical data into a current NI 43-101-compliant resource standard could make the project's economic substance significantly more tangible for the capital market.

IIF presenter Lyndsay Malchuk in conversation with founder Klaus Eckhof about the unique opportunities for his gold projects in East Africa.

https://youtu.be/gOlsNrnwTSI

The story gets even more exciting with Nizi, a 113 km² project in the Kilo-Moto gold field that, alongside the historic King Leopold Mine, includes a former underground operation run intermittently for around 12 years between 1913 and 1931. Of up to seven known quartz gold veins, only two have been mined to date, while underground work has already reached a strike length of around 600 m and a depth of 160 to 180 m – an indication that historical exploration may have covered only part of the system. At the same time, DRC Gold is benefiting from a gold market whose structural demand base remains remarkably robust. The new World Gold Council 2026 study shows that central banks have accumulated an average of around 1,000 tonnes of gold per year over the past four years – twice as much as the average for the previous decade. This is even more important for the outlook going forward! This is because 89% of the central banks surveyed expect global gold reserves to rise within the next 12 months, while a record 45% plan to increase their own gold holdings. This provides gold exploration with long-term macroeconomic tailwinds that extend beyond short-term fluctuations in the gold price.

DRC Gold is therefore no longer merely a bet on a single successful drill hit, but is building a portfolio platform in one of Africa's most significant gold belts via Giro and Nizi. CEO Klaus Eckhof brings decades of experience in Africa to the table and has also been closely involved in developing the Kibali area through previous projects. The investment story has enormous potential, because should DRC Gold confirm and expand its historical resource base and gradually progress towards production, a currently small exploration company could evolve into a much larger gold platform. Today's market capitalization of CAD 32 million would then be a mere footnote!

Geopolitical tensions and the instability of the US dollar, oil and gold prices have really put pressure on the stock market. With increasing volatility, there are many winners and losers. As part of a balanced investment strategy, we therefore recommend that, alongside the battered defence stocks, investors include scarce commodities and critical metals for hedging purposes. After all, diversification ultimately supports strong portfolio performance.