On Monday, BMO Capital Markets adjusted its outlook on Equinox Gold Corp (NYSE:EQX:CN) (NYSE: EQX), raising the price target to C$10.00 from the previous C$8.00, while retaining an Outperform rating on the stock. This revision follows Equinox Gold's announcement of acquiring full ownership of the Greenstone project.
Equinox Gold has finalized a binding agreement to acquire the remaining 40% stake in Greenstone, which will result in the company having complete control over the asset. The transaction, valued at $995 million, aligns with BMO Capital's net asset value (NAV) estimate for Greenstone. The payment structure for the purchase includes $745 million in cash and $250 million in Equinox Gold shares.
To facilitate this acquisition, Equinox Gold has organized funding through a $299 million bought deal and a $500 million term loan. BMO Capital views this strategic move favorably, as it enhances Equinox Gold's interest in what is considered its top asset and is expected to help the company reach its production target of 1 million ounces of gold annually.
The analyst's updated price target of C$10.00 reflects the potential growth and value addition from the complete ownership of Greenstone. This development is seen as a positive step for Equinox Gold in its operational expansion and financial growth.
InvestingPro Insights
As Equinox Gold Corp (EQX:CN) (NYSE: EQX) moves to consolidate its ownership of the Greenstone project, the company's financials and market performance offer a glimpse into its potential trajectory. According to InvestingPro data, Equinox Gold boasts a market cap of approximately $2.18 billion USD, with a notable revenue growth of 14.28% over the last twelve months as of Q4 2023. This financial growth is complemented by a strong return over the last three months, with the company's share price increasing by 26.26%.
InvestingPro Tips suggest that Equinox Gold is expected to experience net income growth this year, with analysts also anticipating an uptick in sales. These projections align with the company's strategic acquisition of Greenstone, which is expected to significantly contribute to its production targets. Moreover, the company's P/E ratio of 59.68 indicates that it is trading at a high earnings multiple, which could reflect investor confidence in its future earnings potential.
For investors seeking to delve deeper into Equinox Gold's financials and market outlook, InvestingPro offers additional insights and tips. There are 6 more InvestingPro Tips available, which can be accessed through the company's profile at https://www.investing.com/pro/EQX. Interested readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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