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March 27th, 2024 | 08:45 CET

Shares in Focus: TUI, Rheinmetall, and Defense Metals with good reasons for price increases

  • Mining
  • RareEarths
  • armaments
  • travel
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The TUI share was one of the top performers on the German stock market yesterday. The EUR 7 mark was exceeded, making things exciting on the chart. Analysts expect significantly higher prices for the tourism group. Rheinmetall shares are among the top performers of the year. An end to the price increase is not in sight. The armaments group has announced a new order worth billions. The manufacture of armaments, aircraft, cruise ships and numerous other high-tech products would not be possible without rare earths. However, most of these come from China and Russia. This makes the Defense Metals share interesting. The Company is making great strides with its rare earths project in Canada. The share should also benefit from this progress.

time to read: 3 minutes | Author: Fabian Lorenz

Table of contents:

    Defense Metals: Rare earths for Europe?

    Defense Metals has confirmed in the past that governments and defense companies regularly inquire about the development of the Wicheeda project in the Canadian province of British Columbia and discuss potential partnerships. Contacts are expected to intensify significantly this year. The Company is working on the preliminary feasibility study and discussing further financing.

    Defense Metals recently provided an update on the status of the Wicheeda project. All test work has been completed to commence the Preliminary Feasibility Study (PFS). This has produced high-grade mineral concentrate grading 50% total rare earth oxide with a recovery rate of 80%. Eleven samples of the mixed rare earth precipitates from the test work have been sent to potential partners, processors or end users. Other tasks within the scope of the preliminary feasibility study, including the planning of the open pit mine and the cost-benefit calculations for tailings storage, are well advanced. The Company is, therefore, fully on schedule to complete the PFS in the second quarter of 2024.

    Defense Metals has already begun examining further financing options and strategic partnerships so that no time is lost and the feasibility study can begin immediately. The Company is expecting strong interest from Europe.

    Rheinmetall: German Armed Forces award billion-dollar contract

    It is quite possible that a defense company will join Defense Metals as a strategic partner. Due to geopolitical developments, companies in the sector are currently seeing significant financial gains. In Germany, Rheinmetall and Hensoldt are among the top-performing shares, while the order books are filling up.

    Rheinmetall announced a new billion-dollar order just a few days ago. The Bundeswehr has commissioned the Company to supply the "infantry heavy weapon carrier". The order is worth around EUR 2.7 billion, and delivery is scheduled to begin next year. The 123 vehicles ordered are based on the Boxer Combat Reconnaissance Vehicle (CRV), the wheeled armored reconnaissance vehicle of the Australian armed forces, which Rheinmetall also builds.

    Rheinmetall CEO Armin Papperger comments: "We are very proud to supply the Infantry Heavy Weapons Carrier, a key element of the German Army's new 'Medium Forces' category. To provide the army with the required combat vehicles as quickly as possible, we are integrating not only our German but also the Australian sites in our Rheinmetall network."

    TUI: Technically exciting

    TUI is currently looking very exciting on the chart. The share is on the verge of overcoming the resistance at EUR 7. If this succeeds, the stock would break out of the sideways movement that has been ongoing since April 2023 and the path to the upside would be clear. While most analysts are still cautious, Morgan Stanley recently upgraded the share from "Equalweight" to "Overweight". At the same time, the price target was raised from EUR 9 to EUR 10. For the analysts, the opportunities currently outweigh the risks for TUI. TUI will publish its half-year figures on May 15. Hopefully, there will then also be a concrete outlook for the current summer season. In any case, the booking trend over the winter was promising.

    Defense Metals is without question the hot stock of the three discussed. However, with a market capitalization of around CAD 55 million, the downside risk appears to be limited. The share is currently trading at EUR 0.12. In April 2023, it was EUR 0.22. Wicheeda is more developed today and should also be a good deal further ahead with potential partners. The demand for rare earths from Western countries has by no means decreased. The demand for military equipment is also increasing; however, it should be noted that Rheinmetall also needs to invest in order to process all the orders. The Company still has to grow into the valuation. The TUI share is exciting. If the share can establish itself sustainably above EUR 7, the way up should be clear for the time being.

    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.

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    Der Autor

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author

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