🔺 What to do when markets are at an all-time high? Find smart bargains, like these.See Undervalued Shares

Barclays bullish on First Quantum stock, sees multiple catalysts driving upside

EditorEmilio Ghigini
Published 12/11/2024, 07:22 pm
FM
-

On Tuesday, Barclays (LON:BARC) upgraded First Quantum Minerals Ltd . (TSX:FM:CN) (OTC: FQVLF (OTC:FQVLF)) stock from Equalweight to Overweight, also increasing the price target to C$25.00 from the previous C$18.00. The adjustment by the firm reflects a positive outlook on the mining company's near-term prospects.

The upgrade is influenced by several factors that could act as catalysts for the company's growth. First Quantum (NASDAQ:QMCO)'s management expressed on a recent conference call that the Panama government is close to approving the Cobre Panama's preservation and safe management program.

This approval is significant as it would allow the company to sell its copper concentrate stockpiles, which could potentially generate around $280 million in revenue.

Additionally, the potential sale of the Las Cruces mine is another reason for the optimistic assessment. Barclays' Net Asset Value (NAV) estimate for this asset is US$325 million. This valuation is derived from an average of the 43-101 Net Present Value (NPV) estimates, which are $392 million at an 8% Weighted Average Cost of Capital (WACC) and $257 million at a 10% WACC.

The third factor contributing to the positive outlook is the ongoing discussions regarding the sale of a minority stake in First Quantum's Zambian assets. The firm's NAV for these assets is US$14.5 billion, an increase from the previous $11.1 billion valuation, based on a long-term copper price of $5 per pound and an 8% real WACC.

Barclays' analyst notes underscore the potential for these developments to significantly impact First Quantum's financial position and market performance. The company's stock is poised to benefit if these positive catalysts materialize in the near term as anticipated.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.