Canaccord Genuity (TSX:CF, LSE:CF) has repeated a 'buy' and upped its price target on West Africa-focused gold producer Endeavour Mining following the company's fourth-quarter results.
Endeavour remains one of our top picks among the senior producers based on the company's solid production profile, deep project pipeline, strong balance sheet free-cash-flow (FCF), and attractive valuation compared to peers, the broker's analysts said in a note.
The miner trades at 0.61 times' net asset value (NAV) compared to the senior peer average of 0.78 times', they added.
Fourth quarter output and all-in-sustaining-costs (AISC) of 398,000 ounces and US$900 per ounce, both beat Canaccord's previous estimates, while full-year production of 1.536 million ounces exceeded the top end of guidance (1.365 million to 1.495 million ounces) and marked the ninth consecutive year that Endeavour has met or beat guidance.
READ: Endeavour Mining beats gold production guidance for 2021
Endeavour has assets across Senegal, Cote d’Ivoire and Burkina Faso and advanced development projects and exploration assets in the highly-prospective Birimian greenstone belt.
The company has guided for production in 2022 of between 1.4 and 1.5 million ounces at AISC of between $890 and 940 per ounce.
Canaccord said it has increased its 2022 production forecast to 1.46 million ounces (Moz) from 1.4Moz and reduced its AISC estimate to $930 per ounce (from $972 per ounce), which represents around a 6% year-over-year decrease in costs.
With higher production and lower costs, its 2022 earnings before interest, tax, depreciation and amortization (EBITDA) forecast has increased around 6% to $1.4 billion, it added.
The broker targets C$48 for the shares, up from C$45 previously.
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