Capstone Copper Corp (CS: CN) (OTC: CSFFF (OTC:CSFFF)) has received an Outperform rating from Raymond James, with a new price target set at C$12.00.
The firm highlighted the company's promising outlook based on its production growth and declining operating costs expected through 2024 and 2025. This positive trajectory is largely attributed to the progress of the Mantoverde development project (MVDP), anticipated to ramp up in the second half of 2024.
The financial institution noted that with the capital expenditures for the MVDP nearing completion, Capstone Copper is poised to see improvements in production and operating costs.
Additionally, the firm anticipates reduced capital expenditure spending leading up to the sanctioning of the Santo Domingo project, which is currently projected for 2026.
These factors suggest that Capstone may enter a phase of cash harvesting through 2026, potentially allowing for balance sheet deleveraging and the ability to explore strategic opportunities.
According to Raymond James, Capstone Copper is well-positioned to benefit from the MVDP in the near term, while the Santo Domingo project is expected to contribute to growth in the longer term. The firm also pointed out that Capstone has several organic growth options within its development pipeline that could further enhance its copper production capabilities with low capital intensity.
In other recent news, Capstone Copper has been the focal point of positive financial analysis from both Macquarie and BMO Capital Markets. Macquarie initiated coverage of Capstone Copper with an 'Outperform' rating, citing robust demand for copper and the company's potential as a pure-play copper investment. The firm also indicated that the company is well-positioned amidst the current trend of mergers and acquisitions in the copper sector.
BMO Capital Markets maintained its 'Outperform' rating for Capstone Copper and raised its price target from Cdn$9.00 to Cdn$11.00. This adjustment followed the company's Q1 2024 financial results, which met market expectations and showed a slight outperformance in adjusted EBITDA. The company's production volumes and cash costs were reported to be consistent with predictions.
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