Berenberg has reiterated its “buy” recommendation on Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF), setting a price target of 3,300p.
That's a near 45% premium to Monday’s trading price of 2,282p, on the view that the West African gold producer’s best days lie ahead.
In a note published last week, analysts described Endeavour as a “high-quality gold business” that is entering a period of strong free cash flow and shareholder returns following the completion of major capital projects in Côte d’Ivoire and Senegal.
The next potential catalyst is expected with the group’s second-quarter results on 31 July, for which Berenberg’s forecasts sit about 16% above consensus.
Despite a share price rally of around 60% since the start of the year, the broker said Endeavour’s valuation remains undemanding.
The shares trade on 2.9 times expected earnings before interest, tax, depreciation and amortisation (EBITDA), and 1.24 times net asset value.
Production from Endeavour’s five mines is expected to hold steady at between 1.2 million and 1.4 million ounces a year in the medium term, with all-in sustaining costs of $1,200–1,300 per ounce.
This should underpin a three-year average free cash flow yield of around 19%, materially higher than peers.
A major new growth project, the Assafou mine in Côte d’Ivoire, is expected to deliver 300,000 ounces per year at a cost of $1,100 per ounce when it enters production in 2028.
Management is likely to greenlight construction in the first half of 2026, with a project update due later this year.
Endeavour is also expected to increase its dividend payout with interim results later this month.
Net debt, which stood at $727 million at the end of 2024, is forecast to swing to a net cash position of over $1 billion by the end of 2026.
Berenberg believes the company’s peer-beating margins, strong pipeline and recovering balance sheet make a compelling case for re-rating.
“There is plenty more to come from this high-quality gold business,” the analysts wrote.