Brokers are queuing up to recommend emeralds, ruby and sapphires specialist Gemfields (LON:GEM).
Hot on the heels of house broker JP Morgan‘s upgrade yesterday, Peel Hunt has started coverage with a ‘buy’ recommendation and gushing praise.
Gemfields is unique, operates in a market where its scale affords it the ability to influence pricing, and it holds best-in-class gemstone mines, said the broker.
It has a competitive advantage over its coloured gemstone peers and is set for strong performance, buoyed further by the growing demand for luxury goods in emerging markets.
Peel Hunt has started a 69p price target but said there is scope for this to rise to 114p if ruby mine Montepuez successfully moves up to full scale production, thugh it adds the company has a lot to do there and also to move production at emerald mine Kagem underground.
“The Kagem emerald mine is currently the jewel in its crown, but will soon be challenged by the Montepuez ruby mine, which has the potential to offer a step-change uplift in valuation, as witnessed on our site visit.”
Yesterday, JP Morgan also upgraded its price target to 69p and its investment stance to 'overweight'.
Shares today were 2% higher at 48.5p.