FTSE 100 miner ENRC (LON:ENRC) is finally shifting into gear after targeting more achievable goals.
That’s the view of German broker Deutsche Bank, which was one of the few that said its third quarter production results made for good reading yesterday.
The broker keeps its ‘buy’ rating based on the valuation, but lowers its target price to 720p from 900p after cutting its earnings expectations on the upwardly revised tax guidance, lower than expected production and ongoing decline in the received ferrochrome price.
“While these are clearly not positive outcomes, the company now appears to have an achievable rather than aspirational plan,” analyst Rob Clifford added.
The delay of the Brazilian iron ore projects and energy project lowers his valuation, but he believes the lack of strategic direction had already dragged the share price down.
In the update, ENRC said production was broadly in line with the previous quarter.
However, the big news was that it is spending US$4.4 bln on five projects over the next five years – three copper, one chrome and one iron ore.