The defense boom shows no signs of slowing down: RENK Group, Antimony Resources, Lockheed Martin

RENK Group - Record Orders, Cash Flow Dip, and a US Push

The Augsburg-based drive specialist is in the midst of a geopolitical double effect. On the one hand, NATO programs are filling the order books. Currently, there is EUR 6.68 billion in the order backlog, more than four times the annual revenue. New orders for tank transmissions and unmanned naval systems underpin long-term visibility well into the 2030s. On the other hand, reality is putting the brakes on: delayed down payments and invoices have caused free cash flow to shrink to just EUR 67 million in 2025. Management speaks of temporary delays, but the market remains skeptical. The gap between accounting profit and operating liquidity is the sore spot. Investors must look closely to see if the payment backlog clears up by summer.

Particularly frustrating for investors are the deliveries to Israel blocked by Berlin, which RENK believes could jeopardize EUR 80–100 million in revenue this year. The response is radical but logical. The group is investing USD 150 million in a US facility in Michigan. This will allow the company to bypass German regulatory hurdles in the future and tie itself directly to American defense programs. The risk lies in high upfront costs and new market dependencies. However, without this step, export opportunities to the world's largest military power would be severely curtailed. Analysts see this as strategic foresight, but also as short-term pressure on cash generation.

Three dates will provide the next signals. On May 6, RENK will present its Q1 figures. Then it will become clear whether the deferred EUR 200 million in revenue from the previous year was actually realized. The Annual General Meeting on June 10 will bring a substantial dividend increase of 38% to EUR 0.58 per share. And the NATO summit in Ankara could provide new impetus for defense spending. Analysts are divided. Some see structural growth, while others warn of cyclical risks and already high expectations. The order backlog provides tailwinds, but the valuation remains ambitious. The stock is currently trading at EUR 54.25.

Antimony Resources: Antimony, the Strategic Raw Material

Very few investors had antimony on their radar until a year ago. This semi-metal is found in virtually all ammunition, in night-vision devices, and as a flame retardant in military equipment. Without antimony, little in defense technology would function. The only problem is that China and Russia control the majority of production. After Beijing drastically restricted exports in 2024, prices surged to around USD 60,000 per ton in 2025. This is exactly where Antimony Resources comes into play. Its Bald Hill project in New Brunswick is considered one of the highest-grade antimony deposits in North America. It offers a real alternative to the strained supply chains, even though antimony prices have consolidated this year.

Recent drill results underscore the property's potential. In April, the company reported the completion of over 8,000 m of a 10,000-m definition program on the main zone. Drill hole BH-25-34 returned 4.38% antimony over 7 m, including a core zone with nearly 10%. Mineralization has been identified over a 700-meter strike length and to a depth of 400 m and remains open in all directions. In parallel, geologists discovered three new zones during the construction of access roads, including the Marcus Zone with massive stibnite at surface over an 80-meter length.

The coming months will bring key milestones. SRK Consulting is already working on the first resource estimate, which is expected in early summer. At the same time, preparatory studies for the environmental impact assessment are underway with GEMTEC. Discussions have begun with the New Brunswick provincial government, which aims to streamline the permitting process. Financially, the company is on a solid footing. Following a capital increase in December, the company has sufficient cash on hand to carry out the planned work. For investors focused on strategic commodities, Antimony Resources thus remains one of the most interesting North American explorers. The stock is currently trading at CAD 1.12.

Lockheed Martin - Record Orders Meet Production Bottlenecks

A glance at the books of defense giant Lockheed Martin reveals a hefty order backlog of USD 186 billion. Yet business is stalling on the factory floor. Only 32 units of the state-of-the-art F-35 fighter jets were delivered to customers in the first quarter, nearly a third fewer than a year ago. F-16 production also came to a complete standstill. Revenue stagnated at USD 18 billion, and operating profit plummeted by 13%. Even more alarming is free cash flow, which plummeted from a positive USD 955 million to a negative USD 291 million. Analysts had expected more.

But the weakness does not lie on the demand side—quite the contrary. Lockheed recently secured a USD 1.5 billion order from Peru for twelve F-16s with an option for another dozen. At the same time, the US military is aiming for a massive expansion of the F-35 fleet, from 47 this year to up to 85 aircraft annually. Washington is also ramping up production of cruise missiles. Instead of 144 JASSMs, 821 are soon to be procured annually. And the Pentagon has presented a seven-year framework for a significant increase in production of Patriot, THAAD, and PrSM.

CEO Taiclet is sticking to the annual forecast. Revenue is expected to be between USD 77.5 billion and USD 80 billion, with free cash flow at USD 6.5 billion to USD 6.8 billion. The operational trough has been passed, and margins are expected to pick up again starting in the second half of the year. Short-term setbacks include the ERP transition, delays in F-16 testing, and bottlenecks in engines and seeker heads. Those with a long-term perspective see a company with full order books, government backing, and technological breadth—provided the production facilities finally get up to speed. Currently, a share costs USD 513.45.

The defense boom remains intact, but investors must recognize the nuances. While the RENK Group is losing revenue in the short term due to German export restrictions, it is strategically tapping into new markets with its US facility in Michigan. Antimony Resources, as an explorer, is benefiting from the geopolitical shortage of the critical semi-metal antimony and is delivering promising drilling results at Bald Hill. Lockheed Martin is struggling with production bottlenecks and negative cash flow, while its massive order backlog offers hope for a strong second half of the year. Those who secure the right niches early on can hope for above-average returns.