The hidden opportunity: Why Commerzbank, Desert Gold, and K+S are now in focus

Commerzbank – Strong figures and strategic uncertainties

Commerzbank remains a classic case of interest rate sensitivity, with its earnings continuing to depend heavily on the ECB's monetary policy. However, two other issues are currently attracting investors' attention: the outstanding half-year figures and the ongoing takeover rumors surrounding Italy's UniCredit. This combination of operational strength and strategic uncertainty is currently defining the investment story.

The figures for the first half of the year are truly impressive. Operating profit climbed to a record EUR 2.4 billion, driven by strong growth in commission business and a continued robust interest income engine. The increase in efficiency is particularly impressive. The cost/income ratio fell to 56%. Despite significant investments in restructuring, net income remained at EUR 1.3 billion. Capital returns to shareholders also remain a key element, with another share buyback worth billions on the horizon.

However, speculation about a takeover by UniCredit is casting a long shadow over this fundamental strength. A deal would offer the chance of a lucrative premium for shareholders and long-term synergies. However, this is offset by considerable risks, including political resistance, regulatory hurdles, and the danger that Commerzbank's strategic independence and established business model would be compromised in the event of integration. The uncertainty surrounding whether this complex project will succeed at all is causing additional volatility, turning the stock into a game of operational strength and strategic roulette. The share price recently fell again due to the uncertainties. One share currently costs EUR 32.58.

Desert Gold – Scores with convincing profitability in Mali

Desert Gold has presented solid fundamentals with the preliminary economic assessment (PEA) for its SMSZ project in Mali. The study for the Barani and Gourbassi deposits envisages an open-pit operation with a life of over 17 years. At a gold price of USD 2,500 per ounce, the net present value after tax is calculated to be USD 24 million, with an internal rate of return of 34%. The comparatively low initial investment of USD 15 million is expected to pay for itself within 3.25 years. Particularly noteworthy are the total costs (AISC), which at USD 1,352 per ounce are significantly below the current market level. The plan is to start with a mobile processing plant in Barani East and later relocate it to Gourbassi. This strategy minimizes initial capital expenditure.

Less than 10% of the total gold resources in the concession area are included in this assessment. The economic attractiveness of the project is particularly evident in its sensitivity to the gold price. An increase to USD 3,000 per ounce would raise the after-tax NPV to USD 41 million and the IRR to 51%. At the time of the study, the spot price was USD 3,366, implying an NPV of USD 54 million and an IRR of 64%. This leverage stems from low operating costs and a lean, modular operating concept that enables flexible adaptation.

In addition to the Mali project, Desert Gold recently secured its option on the Tiegba Gold project in Côte d'Ivoire, which will give it a 90% stake. This strategic diversification not only opens up a politically stable region for the Company, but also positions it in close proximity to major operators such as Allied Gold Corp. The 297 sq km concession area is located in the promising Birimian greenstone belt and already shows historical gold anomalies. This expansion presents an opportunity to establish a second pillar of growth and diversify the portfolio regionally. The stock has not yet fully benefited from the positive news and is currently trading at CAD 0.08.

K+S – Between currency turmoil and future investments

For fertilizer producer K+S, the current US tariffs do not pose an immediate threat. Since a large part of US deliveries originate from the Canadian plant in Bethune and only account for a small portion of the vast American import market, the direct impact is limited. The real challenge lies elsewhere. The weaker US dollar is putting noticeable pressure on profit margins. Since a significant portion of revenue is denominated in dollars, but many costs are incurred in euros, the unfavorable exchange rate is reducing conversion revenues. These currency dynamics are weighing more heavily on the forecast than trade tariffs.

The latest half-year figures paint a mixed picture. Although revenue remained virtually stable at EUR 871 million, EBITDA fell to EUR 110 million. This was due to logistical hurdles, a planned maintenance shutdown in Canada, and special effects. On a positive note, higher sales prices more than offset the impact of declining sales volumes in the agricultural sector. Despite the challenges, the Company is sticking to its annual forecast and expects EBITDA to be between EUR 560 million and EUR 640 million, supported by robust demand and stable potash prices.

Recent activity at management level is interesting. Several members of the Executive Board, including CEO Dr. Christian H. Meyer, have made significant share purchases. This is often seen by investors as a sign of inner conviction. Analysts, on the other hand, remain divided. While some banks, such as Deutsche Bank and UBS, remain skeptical with price targets around EUR 11, Warburg Research is optimistic, issuing a price target of EUR 22. This range reflects both the uncertainties and the potential opportunities. The pressure on the stock, which last traded at EUR 11.51, may stem from Goldman Sachs, which recently reduced its stake from 5.09% to 4.15%.

In volatile markets, Commerzbank, Desert Gold, and K+S offer opportunities, but also some risks. Commerzbank is performing well operationally with record figures, but is being held back by takeover speculation. Desert Gold impresses with a very strong PEA, which promises enormous leverage potential if gold prices rise. K+S is resilient to trade tariffs, but is struggling with currency effects, while insider purchases are a sign of confidence.