Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) has received a ‘Buy’ rating and a £21.00 price target from UBS Investment Bank as the financial services provider initiates coverage of the gold producer.
The miner's London-listed shares are currently trading at about £17.50, while its Toronto-based shares are trading at about C$27.70.
In a research note, the UBS analysts noted that, while gold had faced 12 months of headwinds from hawkish central bank policy and rising real rates, the investment bank's view is that the risk versus reward for gold is improving with Federal Reserve hawkishness and market pricing of interest hikes close to peak.
READ: Endeavour Mining hikes interim dividend 43%
The analysts noted that Endeavour’s competitive cost position and good cost control in the first half of 2022, strong record of project development and hitting guidance, and balanced offering make the company’s investment case compelling compared to its gold peers.
“After an organic growth/investment phase in 2016-19, and M&A/debt reduction phase in 2020/21, EDV’s investment case has become more balanced offering healthy organic growth of around 20% and larger cash returns with forecast distribution yield of more than 5%,” they said.
“In our view, the combination of growth, yield, and improving liquidity on the LSE creates an opportunity for EDV to expand its investor base against an improving gold price environment creating compelling risk vs reward," the analysts concluded.
Endeavour Mining is one of the world’s senior gold producers and the largest in West Africa, with operating assets across Senegal, Cote d’Ivoire and Burkina Faso and a strong portfolio of advanced development projects and exploration assets in the highly prospective Birimian Greenstone Belt across West Africa.
Contact the author at emily.jarvie@proactiveinvestors.com
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