Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) has earned a price target raise and repeat ‘Buy’ rating from Canaccord Genuity (TSX:CF, LSE:CF)'s analysts who say the company remains one of their top picks among senior gold producers.
The analysts wrote in a note to clients that they were raising their target price for the stock from C$43 to C$45 following the company’s fourth-quarter 2022 results and year-end 2022 reserve and resource update.
“Our C$45 price target is predicated on a 50/50 blend of a 0.9x multiple applied to our operating NAVPS estimate plus net debt and other corporate adjustments and a 6.5x multiple applied to 2024E EBITDA (previously 2023E),” they wrote.
Canaccord’s bullish call on the stock coincided with a similarly upbeat assessment of prospects from Barclays Capital, which repeated its ‘overweight’ recommendation and £28.75 price target.
Barclays applauded Endeavour’s plans to sell its Boungou and Wahgnion mines, which it reckons would reduce the gold miner’s group all-in costs by almost a quarter, reduce its exposure to Burkina Faso. “We see 65% upside to [our price target] for our preferred EU precious name,” investors were told.
Endeavour’s Toronto-listed shares were trading up 0.9% at C$30.86, while its London-listed shares had added 3.6% at 1,824p on Monday morning (Eastern Time).
A decade of achieving production guidance
Canaccord, meanwhile, highlighted the company’s achievement of the high end of its production guidance with full-year all-in-sustaining costs of $928 per ounce within the guidance range of $880 to $930 per ounce.
“2022 represents the 10th consecutive year of the company achieving or exceeding its production guidance,” its analysts wrote.
They also noted the company’s announcement of a new green-field discovery at Tanda-Iguela in Côte d'Ivoire of 3mln ounces grading about 2 grams per ton.
Further, Endeavour paid out a record $299 million in dividends and share buybacks while investing $127mln to advance the Sabodala/Massawa expansion and the Lafigué project, which the analysts expect to increase production to 1.6mln ounces by 2025, representing 12% growth over 2022.
The miner also upped its cash balance to $951mln from $906mln a year ago, Canaccord’s analysts noted.
“Endeavour remains one of our top picks among the senior gold producers, based on its fully funded growth profile, coupled with strong execution, a strong balance sheet and capital return program, and inexpensive valuation (trading at 0.55x NAV versus its senior peers at 0.67x),” they concluded.
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