Berenberg raises target price on Tharisa
Analysts at Berenberg nudged up their target price on integrated resource group Tharisa from 240.0p to 260.0p on Monday after the group's full-year underlying earnings beat expectations.
Berenberg said Tharisa's revenues of $686.0m came in "a touch light" versus its $729.0m estimate, mainly due to a platinum group metals effect.
However, the analysts stated lower costs, particularly in the form of lower cost of commodities and lower mining costs, helped drive an EBITDA beat for the group - coming in at $236.0m versus their $230.0m estimate. Earnings per share for the year were in line with guidance and expectations at $0.54.
The German bank said that Tharisa's cash flow statement showed it had generated cash from operations of $174.0m, below its $192.0m estimate, mainly due to working capital adjustments, while capex of $105.0m was below its $132.0m estimate, offsetting the lower cash from operations.
"We adjust our model for the full-year results and make some adjustments to our 2023 estimates, mainly to reflect lower costs that we expect at the mine. This results in an increase to our 2023E and beyond estimates," said Berenberg, which stood by its 'buy' rating on the stock.
Berenberg also said the stock was trading on 0.4x net asset value and 2.2x 2023E EBITDA, and offered a 6.4% dividend yield.
Reporting by Iain Gilbert at Sharecast.com