Canaccord Genuity has initiated a Buy rating on Maverix Metals Inc (TSE:MMX) (NYSEAMERICAN:MMX) (FRA:7781) with a C$8 price target.
The analyst firm noted that it estimates that the precious metal-focused royalty company -- with a portfolio of over 100 royalties and streams in various stages from exploration to production -- will generate $52 million in revenue in 2021 at a roughly 90% operating margin.
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“Producing mines account for 54% of our operating NAV for Maverix, with exploration/development stage projects accounting for the remaining 46%,” analysts wrote.
“Maverix's portfolio is 100% precious metals-based, with 86% of our operating NAV attributable to gold and the remaining 14% to silver. The majority of the company’s assets are in safe, mining-friendly jurisdictions, with 63% of our NAV derived from North America and Australia, 30% in Latin America and the remaining 7% in Africa and Asia (Eastern Russia).”
Canaccord added: “Further, with no single asset representing more than 11% of operating NAV, the company’s revenues are well diversified. Most of the company’s royalties are also uncapped, providing leverage to potential exploration success.”
Analysts also noted that Maverix’s shares -- since the company’s inception in 2016 -- have increased at a 28% compound annual growth rate (CAGR). As a result, its shares have outperformed the CAGRs of gold (+9%), its royalty peers (+12%), and the S&P/TSX Gold index (+7%).
Maverix’s stock recently traded around US$5.41 a share in New York and C$6.88 a share in Toronto.
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