Citing a bullish outlook on silver prices, Peter Bures of Canaccord Genuity has started coverage of four silver producers which include Endeavour Silver Corp. (NYSE:EXK, TSE:EDR).
The broker said it prefers emerging intermediate producers (Fortuna Silver and Endeavour) versus their more "senior" counterparts (Pan American and Hecla) in terms of potential upside.
Endeavour Silver is rated a Hold by Bures with a target price of C$6.25.
“We feel investors who have missed the first leg up in silver commodity prices and silver producer equities now have a chance to get on board following the recent pullback,” Bures wrote in a note.
Bures projects at least 5% upside in silver prices over the next 12-18 months as zinc and lead mine closures impact supply. The analyst noted that increasing demand from photovoltaics industry and inflationary pressures from higher oil prices should also boost silver prices.
“Silver prices have appreciated over 27% year-to-date and are still 29% above the 52-week lows of $13.70/oz witnessed late last year, despite the 15% decline from early August highs,” Bures highlighted.
The analyst added that silver producers should benefit in the near-term due to streamlined costs, expanding production and margins.
According to Bures, the margin improvements from silver miners are sustainable into 2017 and perhaps beyond. On average, the operating margins grew 16 percent this year for the group and the analyst estimates further 9% rise into next year.
The other silver names are : Pan American Silver Corp. (NASDAQ:PAAS), target price $17.50, Coeur Mining Inc (NYSE:CDE) target price $13, and Hecla Mining Company (NYSE:HL) target price $6, as well as assumed coverage of Fortuna Silver Mines Inc (TSE:FVI) with a buy rating and target of C$11.50.
Elsewhere, Google owner Alphabet Inc. (NASDAQ:GOOGL) was reiterated an Underperform with the 12-month price target remaining at $700 by brokers at Wedbush on Wednesday.
Wedbush cited second-half search moderation on touch competition and a shaving of the EPS estimate for 2017 to $40.64 from $40.77 on account of the post-Brexit effect on a weaker sterling currency.