On Thursday, RBC Capital Markets adjusted its outlook on Boliden AB (ST:BOL:SS) (OTC: BDNNF), a major player in the mining and smelting industry. The firm downgraded Boliden's stock from Sector Perform to Underperform, setting a new price target of SEK290.00.
This change in rating comes as Boliden's shares have recently seen a notable performance, outpacing the sector by 8% over the last three months. The stock's rise was attributed to the weakening of the Swedish Krona (SEK) and robust zinc prices.
The downward revision by RBC Capital is based on the anticipation that Boliden AB will face challenges in the coming year. The firm predicts the stock will underperform due to a decline in copper and zinc prices, as well as treatment charges. These factors are expected to have a negative impact on the company's profitability, particularly affecting its free cash flow yield (FCFY) for the fiscal year 2025.
RBC Capital's new commodity forecast has also influenced the revised price target, which represents a 6% decrease from the previous target. The firm's analysis suggests that the changing landscape of commodity prices will play a significant role in Boliden's financial performance. With the expectation of falling metal prices, RBC Capital foresees a tougher environment for Boliden to maintain its recent gains.
In summary, Boliden AB's stock faces a downgrade by RBC Capital amid concerns over its future financial performance. The revised price target of SEK290.00 reflects the potential impact of lower commodity prices and treatment charges on the company's profitability and cash flow.
As the mining sector navigates through the fluctuations of global commodity markets, Boliden's ability to sustain its recent performance remains under close scrutiny.
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