December 20th, 2023 | 07:15 CET
Shares for 2024: TUI in travel boom, Pfizer with monster dividend, Almonty Industries receives millions from Germany
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"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
Almonty Industries: Poised for revenue and profit surge
Will the tide turn for Almonty Industries in 2024? The chances are certainly good. The tungsten producer plans to commission its new flagship mine, Sangdong, next year. It is located in South Korea and is to be developed into one of the world's largest tungsten mines in the coming years. The fact that the German KfW is also co-financing the development underscores the importance of tungsten for Western industrialized nations. It is not without reason that it is one of the critical metals, as it is used in the production of batteries in medical technology and aviation, among other industries. Just a few weeks ago, KfW disbursed a further tranche of the loan in the amount of USD 13.7 million. Almonty has now received USD 53.9 million of the total USD 75.1 million and can enter the final phase at Sangdong. It is worth noting that the Company is already mining tungsten in Spain and Portugal.
Analysts are correspondingly confident about Almonty's sales and earnings performance in the coming years. Sphene Capital expects turnover to climb from CAD 28.9 million in the current year to around CAD 100 million by 2025. According to the experts' estimates, Almonty will close the current year with a negative EBITDA for the last time. A minus of CAD 3 million is estimated. After a positive EBITDA of CAD 20 million in the coming year, this figure is expected to reach CAD 45 million in 2025. The after-tax profit is then expected to be CAD 24.5 million. With a market capitalization of around CAD 120 million, the share appears to be anything but expensive.
TUI: Travel boom continues
The TUI share has been one of the surprises of recent weeks. It has gained around 50% in value since its low of EUR 4.61 at the end of October. However, it would still need to climb more than 50% just to reach the yearly high of EUR 11.44, not to mention the pre-COVID level of over EUR 30.
Operationally, things are going well. With the preliminary figures for the past financial year 2022/23, the tourism group reported an increase in sales of EUR 4.12 billion to EUR 20.67 billion. Adjusted EBIT more than doubled from EUR 409 million to EUR 977 million. One reason for the fall in the share price in the current year was the high level of debt. TUI is making progress in reducing this. A decline in net debt (in accordance with IFRS 16) from EUR -3.43 billion to EUR -2.1 billion was reported.
Last week, the summer program for 2024 was presented. It is the most critical time of the year for the tourism group. And early bookings for the coming summer are already expected to be 25% up on the previous year. According to the report, customers are booking traditional vacation destinations such as Mallorca and Antalya and Greek islands such as Crete and Rhodes as top travel destinations. However, long-haul trips like the USA or the Maldives are also trendy. The early booking campaign runs until February 28, 2024.
While some analysts are still cautious about the TUI share, Deutsche Bank recommends it as a "Buy". The analysts are confident that the positive business development will continue. They have raised their price target slightly from EUR 10 to EUR 10.50.
Pfizer: High dividend and share price at ten-year low
Pfizer shareholders needed strong nerves this year. The share price almost halved and is currently trading at around EUR 25. Falling sales of BioNTech's COVID-19 vaccine caused some disgruntlement. The pharmaceutical giant has invested the high profits of recent years in takeovers - how these pay off will probably determine the share price performance in the coming year. Two analysts have recently recommended the Pfizer share as a "Buy". One of them being DZ Bank. Although the Group's recently published forecast was initially disappointing, the analysts still see opportunities for sales and earnings to exceed the low market expectations. The DZ Bank price target for the Pfizer share is USD 33.
With a target price of USD 32, Jefferies is at a similar level. Their analysts were also disappointed by Pfizer's forecasts for 2024. Nevertheless, they recommend the share as a "Buy". The share could have bottomed out at the current ten-year low, and the dividend yield is now 6%.
One year's losers are often among next year's top performers. All three stocks presented have the potential to perform well in 2024. Almonty is still a small cap, but with the commissioning of Sangdong, it could move into a new league - in terms of turnover, profit and market capitalization. Things are also looking good for TUI at the moment. The numerous early bookings - despite Germany's difficult overall economic situation - point to a successful 2024. At Pfizer, the high dividend is attractive, but the takeovers must bear fruit.
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