Maine’s Champion of Munitions and Molybdenum; Initiate on ELMT at OW ($20 PT)

Research evidence excerpt

Maine’s Champion of Munitions and Molybdenum; Initiate on ELMT at OW ($20 PT)

May 18, 2026

Executive Summary

We view Elmet Technologies (ELMT) as an attractive opportunity to get exposure to the

combined tailwinds of U.S. munitions growth, U.S. defense electronics growth, and U.S.

critical materials’ supply chain reshoring. Starting with munitions, we view ELMT as well-

positioned to materially accelerate its tungsten processing business (~15% of sales),

thanks to acceleration of both U.S. munitions modernization and munitions restocking

budgets. Turning to defense electronics, we think ELMT’s microwave technologies and

molybdenum processing businesses (combined ~25% of sales) can deliver meaningful

growth, thanks to a mix of U.S. missile defense modernization, satellite demand, and radar

system replenishment. Lastly, we think U.S. industrial reshoring trends provide a

constructive backdrop for ELMT’s industrial business (~60% of sales) as businesses look to

diversify away from potential critical materials’ supply chain risks. We admit those risks,

which have driven significant growth in materials pricing over the last year, could also drive

risks for ELMT. However, we think the risk-reward outlook for being a processor of

constrained materials skews positive, thanks to both pricing pass-through and potential

Defense Production Act benefits.

Exhibit 1: Cantor Estimate Summary

Figures in millions of USD 2024 2025 2026E 2027E 2028E

Sales $190 $202 $222 $249 $284

Adj EBITDA $21 $24 $24 $29 $37

EPS $0.00 $0.42 $0.34 $0.55 $0.71

FCF $16 $3 $4 $17 $28

Source: Cantor

PT and Valuation – We arrive at our $20 PT for by taking a weighted average of two approaches:

EV/EBITDA (50%) and FCF Yield (50%) vs. FY27E estimates. While a unique comp vs. both