Stifel GMP has repeated a 'Buy' rating; on Maverix Metals Inc following the company's recent Q2 results but with a reduced target price of C$7.75, down from C$8.25, albeit still well above current trading levels.
The brokerage's analysts noted that Maverix's Q2 revenue of $14.2 million from 7,600 GEOs (Gold Equivalent Ounces) sold was slightly off their estimates of $15.0 million from 8,300 GEOs sold.
They pointed out that GEOs sold from the company's Omolon royalty came in significantly below their estimates, as a result of ongoing restrictions on Russia negatively impacting Polymetal's Omolon operations.
READ: Maverix Metals says operating and financial results for second quarter ended June 30, 2022, show steady progress
The analysts noted that Maverix has been accruing revenue from Omolon this year, but without a clear solution to realizing cash payments from the royalty, the company is excluding Omolon from the second half of 2022 and revised its full-year guidance lower by 4,000 GEOs to 28,000-31,000 GEOs.
The Stifel analysts said: "We are taking a conservative approach and removing all attributable revenue from Omolon going forward until a clear solution to realize cash payments is attained."
"As a result," they added, "our cash flow estimates take a hit (on average our 2023-2025e CFPS is reduced by around 12%)."
This has led to the cut in target price to C$7.75, the analysts said. In late morning trade on Tuesday, Maverix Metals shares were changing hands at C$4.99, up 1.6% on the previous closing price.
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