Solidus Securities has set a target price of €57 a share for Metlen Energy & Metals and maintains its “Buy” recommendation (BUY).
The target price implies upside of about 16% from the current level of €49. It is based on three scenarios: €30.5 in the bear case (15% weighting), €50.7 in the base case (45%) and €74 in the bull case (40%).
The broker acknowledges that it gives greater weight to the bull case. This is because it considers it more likely that the price of gallium will remain high, new contracts will be signed and the defence business will translate into specific project awards. With a more balanced weighting (25/50/25), the valuation would be €51.5.
The report, authored by Research Director Dr Panos Dantis, focuses on the valuation of the new activities. According to the analysis, they are worth a total of about €3.7 a share in the base case and €9.8 in the bull case. The biggest driver is defence and space, at €2.7. BESS follows at €0.6 and gallium at just €0.5.
As for gallium, despite contracts covering up to 41% of production with buyers in the US and Japan, Solidus notes that even at $3,000/kg, annual production of 50 tonnes would generate revenue of about €130 million.
The report concludes that the new growth areas strengthen the investment case. The stock’s performance depends primarily on whether the group reaches EBITDA of €1.35bn in 2027 and on the multiple applied to its core businesses. Each turn of the multiple is worth about €8.7 a share, more than twice the value of all the new activities combined. Based on a reverse SOTP analysis, the current share price reflects only about €2 from the new growth areas.
In the first-half results, revenue came to €3.987bn (+11%), EBITDA to €550 million (+24%) and net profit to €313 million (+23%). The net debt-to-EBITDA ratio fell to 1.7x from 3.1x. Solidus notes, however, that EBITDA includes non-recurring transactions, that new costs were recorded on legacy MPP contracts, and that the reduction in leverage was partly due to customer advances.
For 2026, the broker forecasts EBITDA of €1.05–1.10bn, within its guidance range of €1.00–1.15bn, and net profit of €560–620 million. It will reassess its view after the third-quarter results.