Perseus Mining Ltd (ASX:PRU) has had its target price recently upgraded by three major brokers - Citi Research, Canaccord Genuity and Hartleys.
The average of the target prices from these brokers is 93 cents per share, which is an upside potential of about 26% from the current share price of 74 cents.
READ: Perseus Mining has target price upped by Citi Research over bullish outlook
Citi Research has lifted its target price for Perseus by 10 cents to 85 cents per share and has maintained its Buy/High Risk recommendation.
Following is an extract from Citi’s research update on Perseus:
Maintain Buy (High Risk) — PRU’s share price has tracked gold to US$1400/oz+ rallying 47% QoQ (vs XGD+30%). On our gold price deck of US$1450/oz in FY20, we expect 25% EBITDA growth and an EV/EBITDA multiple of 3.6x, a discount to peers at 8.5x (consensus). We maintain our Buy (High Risk) call, TP lifts to 85cps.
Outlook, FY20 and Yaouré — FY20 expects 260-300koz, similar to FY19 at lower site costs of US$800-975/oz. Production is weighted to 2H (140-160koz) on higher Edikan grades. For FY20, we estimate 278koz @ US$928/oz. PRU expects to break ground at its third gold mine, Yaouré, in the coming week; the schedule for first gold in Dec20 is maintained. Signing of the Mining Convention to lock in fiscal terms should be the next catalyst.
Corporate — Cash and bullion at June 30 was ~A$170m, with A$127m cash – an increase of A$46m QoQ. A$54m of cash was from the exercise of warrants. On our numbers, PRU shouldn’t need to draw on its US$150m credit facility to fund Yaouré. PRU hedged 16% of production to FY21 (54koz of Au @ US$1290/oz). Including spot contracts, total hedge position is 274koz @ $US1299/oz (vs spot US$1434/oz).
READ: Perseus Mining’s price target raised by Canaccord Genuity after exceeding gold production target
Global capital markets group Canaccord Genuity has retained its buy rating for Perseus and has increased the price target to $1.05 from $1.00.
Following is an extract from Canaccord’s June quarter report on Perseus:
Outlook: FY20 guidance is in-line with expectations with 260-300koz at US$800-975/oz comparing against prior CGe of 267koz at US$949/oz. Production has a slight bias to the 2HFY20.
Valuation & Recommendation
Model revisions include a minor upward adjustment to FY20 production estimates to 277koz, lowered unit mining costs at Edikan, and updated forward curve pricing assumptions for gold. Net of the changes, our target price (1x forward curve NPV5%/10%) increases slightly to A$1.05.
We maintain our BUY rating, with PRU a Q3 Focus List Pick.
READ: Perseus Mining a low cost, well-funded gold producer: Hartleys
Hartleys has maintained its buy recommendation for Perseus and has increased the price target to 90 cents per share.
Following is an extract from Hartleys’ research update:
Transformation complete. Buy.
Perseus affirmed its relative low-cost status in the June 2019 quarter. The company now has the balance sheet, margins and growth profile befitting a much better share price rating. Incorporating higher base case gold price assumptions upgrades our valuation to 86cps and price target to 90cps.
Buy recommendation maintained.