This Canadian junior is a crucial critical minerals stock, analyst says

National Bank Financial analyst Baltej Sidhu says that 5N Plus (5N Plus Stock Quote, Chart, News, Analysts, Financials TSX:VNP) is benefiting from a broader defence supply-chain re-rating, raising his target to $38.00 from $33 .00 and maintaining an “Outperform” rating.

In his April 21 note, Sidhu said the geopolitical backdrop has reinforced 5N Plus’s position in critical materials, with “defence demanding accelerating, supporting upside.”

As reported by the Globe and Mail, the analyst said the broader valuation backdrop has become more supportive, with defence comparables’ forward EV/EBITDA multiples on 2027 estimates rising to 18.0x from 15.2x at the end of 2025, while 5N Plus moved to 18.2x from 12.5x.

Sidhu said recent developments in the Iran conflict have also highlighted structural supply constraints in precision-guided missile systems, adding that germanium is “an important input in many modern precision-guided munitions,” reinforcing 5N Plus’s relevance in the defence supply chain.

U.S. defence spending is accelerating, with $24.7-billion already allocated to munitions expansion and a potential $20-billion to $50-billion supplemental package under consideration. He said that should support investment across the defence supply chain and added, “We believe VNP is seeing increased engagement from major U.S. defence contractors, supporting its positioning within this ecosystem.”

For the first quarter, Sidhu maintained forecasts of $111.4-million in revenue and $24.9-million in Adjusted EBITDA, ahead of Street expectations of $102.4-million and $22.1-million. He said investors “could see it print its ninth consecutive beat.”

Supply-chain security and domestic sourcing of critical materials are helping drive the stock, while customer priorities are shifting away from China-linked cost advantages and toward supply reliability. He pointed to First Solar’s planned move to source CdSe from 5N Plus beginning in the second half of 2026.

He also said defence-related momentum is building, with customer engagement rising materially over the past six months, particularly in the U.S. across germanium, detectors and optics.

“Operational momentum remains strong, driven by space solar demand across commercial, defence, and satellite constellations,” Sidhu said. He added that visibility remains high, with 2026 fully sold out, 2027 largely contracted and backlog extending into 2030, while AZUR’s capacity expansion continues with a 25% increase underway.

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