On Friday, BMO Capital Markets adjusted its outlook on Coeur Mining Inc (NYSE:CDE) shares, raising the price target to $7.50 from the previous $6.75. The firm has maintained its Outperform rating on the stock.
The revision follows the successful ramp-up of Coeur’s expanded Rochester operation, which has reached its full operating rate of 88,000 short tons per day (stpd) as of the end of the second quarter.
The company's completion of the Rochester operation's ramp-up aligns with its prior guidance, marking a significant operational milestone. Although the ore stacked in the quarter amounted to 4.3 million short tons, slightly below expectations, Coeur anticipates placing 7-8 million short tons per quarter in the second half of the year, which corresponds with BMO Capital Markets' estimates.
The progress at Rochester has been a key factor in Coeur Mining reaching a free cash flow (FCF) inflection point as the second half of the year approaches. This development has prompted BMO Capital Markets to slightly increase their target-setting multiples for the mining company.
Coeur Mining's achievement of full capacity at the Rochester mine is a clear indication of the company's operational capabilities and adherence to its projected timelines. The firm's outlook suggests confidence in Coeur Mining's performance and potential for continued growth in the near term.
"In other recent news, Coeur Mining Inc. announced encouraging exploration results at its Kensington gold mine in Southeast Alaska, hinting at potential extensions of the mine's life.
These findings were part of the company's exploration program, with significant drill results from the Elmira and Kensington deposits. In the same vein, Coeur Mining reported a strong first quarter, with a 14% increase in revenue and a 76% rise in adjusted EBITDA compared to the previous year.
BMO Capital Markets upgraded its rating on Coeur Mining shares to Outperform, increasing the price target to $5.50 from the previous $4.25. The upgrade followed the company's first-quarter results, which aligned with market expectations, featuring a consensus earnings per share (EPS) of -$0.05. The company also exceeded anticipated production levels and reported lower operating costs.
In addition to these developments, Coeur Mining commenced commercial production at its Rochester mine, consistently surpassing the 70,000 short tons per day mark. This increase in capacity is projected to generate positive free cash flow in the second half of the year, which Coeur Mining plans to use for debt reduction. As part of its future plans, the company is on track to meet its 2024 production guidance and plans to start deleveraging in the third quarter."
InvestingPro Insights
Following the positive outlook from BMO Capital Markets on Coeur Mining Inc (NYSE:CDE), current data and insights from InvestingPro provide a multifaceted view of the company's financial health and market performance. With a market capitalization of approximately $2.7 billion and a recent surge in stock price, Coeur Mining's valuation reflects significant investor interest. The company's stock has experienced a strong return over the last month, with a 22.2% increase, and an even more impressive rally over the last six months, boasting a 135.07% price total return.
While Coeur Mining has shown robust revenue growth, with a 7.96% increase over the last twelve months as of Q1 2024, it is important to note that the company has not been profitable during this period, with an operating income margin of -3.05%. However, analysts predict that the company will turn profitable this year, aligning with the operational successes such as the Rochester mine's expansion. Additionally, the company's stock is trading near its 52-week high, at 99.27% of this threshold, indicating that it is currently at a peak valuation in the eyes of investors.
For those considering an investment in Coeur Mining, or for current shareholders looking to deepen their analysis, there are additional InvestingPro Tips that could provide further insight. For instance, despite the lack of dividend payouts, the expected growth in net income and the company's volatility could present opportunities for strategic investing. To explore these and other expert insights, interested readers can visit InvestingPro for a comprehensive analysis. There are currently 10 more InvestingPro Tips available, which can be accessed with the use of coupon code PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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