your initial deposit *subject to change and depends on individual circumstances.
Eurasia Natural Resources is a Kazakhstan based natural resources company with operations in exploration, mining, processing, power generation, logistics and marketing. The company has a strong focus on Iron Ore, Bauxite, Ferroalloys and Manganese.
Goldman Sachs initiates coverage of ENRC with 1,100 pence price targetJune 20 2011, 9:13am
Goldman Sachs this morning initiated coverage of Eurasian Natural Resources (LON:ENRC) with a buy recommendation and 1,110 pence a share price target.
The broker has also added the stock to its pan-European buy-list, which consists of a small selection of shares it expects to significantly outperform the market.
The ultra-bullish valuation suggests investors could make a more than 50 per cent return buying now. At 9 am ENRC was trading 12 pence higher at 728 pence.
The source of the opportunity, according to Goldman, is the company’s exposure to “tight or pro-cyclical commodities” such as iron, stainless steel, aluminum and copper.
Analyst Yulia Chekunaeva expects the results of a corporate governance review to buoy confidence in the stock, which will be helped by positive news flow from green field projects in Africa, which should help drive top-line growth.
“We believe that ENRC’s exposure to tight and or pro-cyclical commodities, a regional sales skew towards BRICs and low production costs strongly position the company to benefit from the pickup in global growth that our economists expect and strengthening commodities momentum,” Goldman mining expert added.
“Since the beginning of the year, the stock has underperformed its commodities basket and the MSCI EMEA by 35 per cent.
“We believe this provides an attractive entry point to gain exposure to long-term commodities growth.”
ENRC was in the business headlines last week as the rumour mill suggested it was a takeover target of commodities trader Glencore.
Glencore went on record as saying it wasn’t interested in doing a deal imminently, which prevents it from bidding for six months, but stopped short of ruling out a takeover at a later date.