Canaccord Genuity (TSX:CF, LSE:CF) said it is maintaining a ‘Buy’ rating and C$48 price target on Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) after the gold producer reported a 79% jump in profits for 2021 on record production.
“Overall, we see the results as largely neutral given that production and preliminary costs previously released,” the Canaccord analysts said in a note to clients.
Endeavour saw its adjusted net earnings grow to US$577 million from US$323 million in 2020 as revenue from continuing operations almost doubled to US$2.8 billion. Revenue was boosted by the acquisition of the Wahgnion and Sabodala-Massawa mines, which contributed a total US$926 million, and the inclusion of the Boungou and Mana mines for the full year.
READ: Endeavour Mining FY profits jump on record gold output; sees strong 2022
Endeavour produced 1.54 million ounces (oz) of gold in 2021, up 69% on the previous year, its ninth consecutive year of achieving or beating annual production guidance. The company lowered its gold production guidance for this year to between 1.315 million and 1.400 million oz, from the previous range of 1.4 million to 1.5 million oz, to take into account the previously announced sale of its non-core Karma mine.
The Canaccord analysts noted that Endeavour ended 2021 with $906 million in cash, net cash of $76 million, and a $500 million undrawn revolving credit facility.
They also pointed out that the company was selected to be added to the FTSE 100 index, effective March 21, 2022, with the potential to be added to the MSCI UK index in May.
The analysts concluded: “We maintain our BUY rating and our target price of C$48.00. Our target price remains predicated on a 50/50 blend of a 1.0x multiple applied to our operating NAVPS estimate plus net debt and other corporate adjustments and a 7.0x multiple applied to 2022E EBITDA.”
Shares of Endeavour recently traded up 2% to $31.99 in Toronto.
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