Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Goldman Sachs cuts ENRC price target after interim results

Goldman Sachs cuts ENRC price target after interim results

Analysts at Goldman Sachs have reduced their guidance and target price for Eurasian Natural Resources (LON:ENRC) on the back of the Kazakh miner's interim results.

Last week’s results report from ENRC showed strong growth in earnings and revenues, but it still fell short of Goldman Sachs’ projections.

ENRC’s earnings before interest, tax depreciation and amortisation (EBITDA) jumped 33 percent year on year to US$1.92 billion and revenues climbed 32 percent to over US$4 billion.

Earnings per share increased 30 percent, to US 91 cents and there is a dividend per share of US 16 cents.

Goldman analysts led by Yulia Chekunaeva said the figures were slightly behind their estimates and consensus forecasts, owing to cost inflation.

As a result, Chenukaeva cut her revenue estimates for ENRC for 2011-2013 by 2 to 3 percent and earnings per share projections by around 7 percent on rising charges and tax rates.

The 12 month price target was reduced from 1,100 pence to 1,060 pence, which, however, still represents a massive premium of over 70 percent to the stock’s Tuesday’s close of 612 pence.

Accordingly, the “buy” recommendation was upheld with Chenukaeva noting that according to Goldman’s commodity analysts have not reduced their price forecasts, believing that demand will be supported by global GDP growth and “supply-side disappointments”.

Goldman’s base case scenario is for the Federal Reserve to unleash the third round of quantitative easing (QE3) later this year or in early 2012, which should provide more support to commodities.

Apart from exposure to strong commodity prices, Goldman based its “buy” rating for ENRC with its strong balance sheet, low cash costs and flexible growth expenditure programme.

ENRC’s share price has been depressed by the turmoil at its latest annual meeting in June, which saw two directors voted off the group’s board. One of them advised shareholders to sell shares the first chance they get.

ENRC is expected to complete its corporate governance review next month.

View full ENRC profile View Profile

Eurasian Natural Resources Timeline

November 05 2013
April 24 2013
April 19 2013

Related Articles

Sample from Thackaringa Cobalt Project
September 05 2018
Recent pre-feasibility study confirmed that the Thackaringa project is of global significance as a potential source of high-purity cobalt for the battery revolution.
March 27 2018
In January this year, shares in the materials group began trading on Nasdaq First North Stockholm
periodic table
September 10 2018
W Resources should be in production from La Parrilla next year

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use