Sell Rheinmetall? Evotec with AI Potential and Lahontan Gold's 22% Resource Boost!

Lahontan Gold: Resource Estimate Raised by 22%

Gold headed into the weekend with a price above USD 4,600. Lahontan Gold is an interesting explorer to watch in the new gold rally. The explorer aims to become a gold producer as early as next year. Until then, investors can look forward to plenty of news flow. Just like last week. Lahontan Gold significantly increased the mineral resources of its flagship Santa Fe project in the US state of Nevada. The stock has responded so far with a rise of over 9%. But with a market capitalization of around CAD 170 million, there still seems to be plenty of room for growth.

The updated resource estimate now shows 1.195 million ounces of gold equivalent in the "Indicated" category, as well as an additional 1.190 million ounces in the "Inferred" category. Compared to the 2024 estimate, this represents a total increase of 435,000 ounces, or 22%. The new calculation is based on 1,275 drill holes totaling 136,515 m.

The Santa Fe deposit itself showed particularly strong growth. There, resources increased by more than 26%. The indicated resources amount to 31.15 million metric tons averaging 0.99 g/t gold equivalent (AuEq), totaling 993,000 ounces. In addition, there are 41.60 million metric tons averaging 0.71 g/t in the "Inferred" category, representing a further 954,000 ounces. At the same time, near-surface oxide resources at Slab and York were also significantly expanded. There, the increase compared to 2024 is more than 37%.

Further growth potential stems from the fact that, according to the block model, the gold and silver mineralization extends beyond the conceptual mine boundaries previously assumed. This results in additional drilling targets both in the area of deeper sulphide mineralization at Santa Fe and within the Slab-Calvada-York area. The higher-grade sulphide resources, in particular, could play an important role in the future. Lahontan is currently investigating whether these can be processed economically through an upstream oxidation process followed by cyanide leaching.

The new resource estimate now forms the basis for an updated preliminary economic assessment (PEA). This assessment will examine both a cost-effective open-pit mine with heap-leach processing for the oxide resources and a potential second production phase for the sulphide resources. At the same time, planning is underway for mine design, process flow, and permitting. Lahontan thus sees itself transitioning from a project developer to an operator and continues to target the start of construction at Santa Fe in 2027.

https://youtu.be/QGRV7IfTWec?si=GHVNPooFwSnStJ6n

Rheinmetall: Are Expectations for 2028 and Beyond Too High?

So far, it has been a good summer for Rheinmetall's stock. After plummeting to EUR 900, the stock rebounded strongly in July and August, briefly surging back above EUR 1,200. But now analysts are pouring cold water on the price surge.

mwb research continues to view Rheinmetall as a clear operational winner of the European defense boom. However, market expectations starting in 2028 appear too ambitious. While the order backlog of EUR 80.5 billion attests to strong demand, only EUR 33.6 billion is expected to be converted into revenue over the next 2.5 years, with about 90% of that from firm orders. This largely underpins the consensus estimates for 2026 and 2027. For 2028, however, a large gap is emerging. Of the expected EUR 25.4 billion in revenue, only about 9.6% is covered by the current firm order backlog. Even when framework agreements are factored in, according to mwb, about 77% of the expected 2028 revenue remains unsecured.

From the analysts' perspective, Rheinmetall would therefore have to secure an exceptionally large number of new orders in a short period of time and simultaneously convert them into revenue quickly. Assuming an annual backlog conversion rate of 30%, new orders totaling approximately EUR 65 billion would be needed by the end of 2028 to meet current consensus expectations. mwb considers this ambitious. In addition, the recently discussed German procurement plans for 2027 signal lower spending in some areas—ironically, precisely in the categories of ammunition, combat vehicles, and military vehicles. It is particularly problematic that only ammunition has a short production lead time that could make a noticeable contribution to closing the 2028 revenue gap. New orders for armored vehicles, on the other hand, often do not contribute to revenue until later due to longer lead times.

mwb is therefore not changing its estimates for 2026 and 2027, but is deliberately remaining below the market consensus starting in 2028. Analysts expect Rheinmetall to generate revenue of EUR 22.6 billion in 2028. EBITDA is then projected to be EUR 5.5 billion, and earnings per share are projected to be EUR 57.11. In the analysts' view, the share currently prices in a very smooth ramp-up of orders and production, leaving little room for delays. The price target remains at EUR 1,050, and the rating is still "Sell." RBC is among the Rheinmetall bulls. Analysts estimate the fair value of the shares at EUR 1,600. To further drive the group's growth, experts believe the defense contractor is capable of making one or two acquisitions.

Evotec: Will AI Potential Provide New Momentum?

Following disappointing half-year results, Evotec's stock is at rock bottom. Confidence in the new management has been shaken, and growth potential is lacking. Can the latest announcement provide new momentum?

Evotec and Odyssey Therapeutics have agreed to a strategic research and development collaboration in the field of autoimmune and inflammatory diseases. In this partnership, Odyssey combines its expertise in disease biology with Evotec's data-driven drug discovery platform, advanced screening technologies, proprietary compound libraries, and AI-powered data science solutions. The goal is to more quickly identify and validate new small-molecule drug candidates for several disease-relevant targets. High-throughput experiments and machine learning are intended to help identify and further develop promising drug series more efficiently.

As part of the collaboration, Evotec is to provide validated drug series for several target structures and will receive performance-based milestone payments in return. Financial details were not disclosed. The collaboration aligns with Evotec's strategy of deploying its integrated research platforms in disease areas with high unmet medical needs and accelerating the early development process of new therapies by combining experimental methods with AI.

This latest announcement, with a touch of AI-driven optimism, is unlikely to be enough to spark a comeback for Evotec shares. There is no urgent need to buy the stock. By contrast, there are strong arguments for rising prices at Lahontan Gold. Gold appears to be launching a new rally. It is precisely in this positive environment that the company is increasing its resource base, working on the preliminary economic assessment (PEA), and planning to begin construction of the mine as early as next year. Given this, the stock appears undervalued. There is not much upside potential for Rheinmetall at the moment. Analysts at mwb make a quite plausible case for why the company will need additional major orders in the next 6 to 12 months. Or Rheinmetall could acquire one or two companies.