Up to 200% upside potential! Evotec, Tui, and Almonty Industries shares!

Almonty Industries: Has revaluation finally begun?

Almonty is currently convincing in many areas: Strong share price performance, impressive financial results, and a buy recommendation. The tungsten producer seems to have finally caught the attention of investors. At EUR 0.54, the share is trading at its highest level since the beginning of 2023 and has gained around 38% in the current year alone. From Sphene Capital's perspective, the commodities company's shares with mines in Spain, Portugal, and South Korea, remain a "Buy". The analysts from Munich have slightly raised their price target from CAD 2.13 to CAD 2.31 after convincing half-year figures and have confirmed their "Buy" recommendation.

Almonty positively surprised analysts with its performance in the first half of 2024. At CAD 15.8 million, revenue was around 25% higher than in the same period of the previous year and also exceeded analysts' estimates. The current growth driver for Almonty is the increased production at the Panasqueira mine in Portugal. While the mining business is profitable, EBITDA of CAD -1.5 million and the net result of CAD -5.6 million were still negative, as expected, but turned out better than anticipated. In addition to negative currency effects, Almonty's result was impacted by investments in the development of the Sangdong mine in South Korea. With the commissioning of what is expected to become the largest tungsten mine in the world, Almonty is set to grow to a new dimension in the coming year.

Sphene Capital expects revenue of CAD 26.5 million in the current year. This figure is projected to reach CAD 104 million next year and CAD 187.5 million by 2026. EBITDA is set to explode from CAD -4.5 million in 2024 to CAD 15.8 million in the coming year and CAD 45.8 million in 2026. In 2026, Almonty's net profit should then be CAD 27 million. This puts the price/earnings ratio for 2026 for the largest supplier of the critical raw material outside China and Russia at well below 10. From the analysts' point of view, this valuation is clearly too low, and the Almonty share is a buy.

Evotec: Board members buy, and analysts disagree

Analysts currently have very different views on whether Evotec shares are a buy or a sell. While RBC has reduced its price target for the German biotech company's shares from EUR 16 to EUR 12, the share price would still have to almost double to achieve this. On the positive side, analysts appreciate that Evotec plans to focus more on profitability and less on aggressive growth in the future. However, they caution that the transition of the business model will not be smooth and will take time.

Deutsche Bank expects a significant decline in the Evotec share price. The analysts have confirmed their "Sell" recommendation. The target price is EUR 4. The analysts are still shocked by the latest quarterly figures. In their view, the new Management Board will need considerably longer to realign the Company. It cannot be ruled out that there will be further negative surprises in the coming quarters.

The new Management Board member, Christian Wojczewski, seems convinced of Evotec's future prospects, having bought shares worth around EUR 170,000 following the quarterly figures. His fellow board member, Craig Johnstone, also took advantage of the share price weakness below EUR 6 and invested slightly more than EUR 16,000. They have perhaps initiated a trend reversal.

Is Tui share fairly valued or poised to jump to EUR 10.50?

Given how much Germans are currently enjoying travel, one might be surprised by the performance of the Tui share. The shares of Europe's largest tourism group have lost around 13% of their value in the current year. Business developed strongly in the first half of the year, progress is being made in reducing debt, and bookings for fall/winter have also been convincing so far. The only factor that speaks against a rising share price is the concern that Germany's weak economy could dampen travel enthusiasm next year, although this has not been evident so far.

On Tuesday, Tui Germany CEO Stefan Baumert once again confirmed the positive outlook and reported the "strongest fall vacations in terms of demand ever". Due to the insolvency of competitor FTI, Tui is offering 75,000 additional vacation packages. Beach vacations in the Mediterranean are also the most popular in the fall.

However, the Tui share is not very popular with analysts. Deutsche Bank currently recommends the Tui share as a "Buy", with a target price of EUR 10.50. Among the many Tui pessimists are the analysts at Bernstein Research. They see the fair value at EUR 6.80 and currently see no upside potential.

Whether the Management Board members have heralded the turnaround at Evotec with their purchases remains to be seen. The share is certainly interesting in the long term and is currently also a potential takeover candidate. However, the ongoing "cleanup" efforts could still lead to unpleasant surprises. At Almonty, the start of production at Sangdong is drawing ever closer; the risks are falling, and investors are buying in. At Tui, the current operating performance does not match the share price performance. The question is whether the share price will follow suit or whether the desire to travel will continue in the coming year.