Broker tips: Hochschild Mining, SSP, Restore

Analysts at Berenberg slightly raised their target price on silver and gold miner Hochschild Mining from 90.0p to 100.0p on Wednesday as it incorporated higher production levels and lower-than-expected costs into its model following the group's fourth-quarter trading update earlier in the week.

Berenberg stated Hochschild's attributable fourth-quarter silver-equivalent production of 7.0m ounces was in line with its 7.1m ounces estimate, split between 4.7m ounces from its Inmaculada mine in Peru, as well as 800,000 ounces from Pallancata and 1.6m ounces from its San José project in Argentina.

"The better-than-expected production comes from Inmaculada guidance of 16.9-17.5m ounces versus our 15.4m ounces expectation, alongside slightly improved production from the rest of the portfolio," said Berenberg.

All-in sustaining costs for 2022 were in line with guidance of $18.50-19.00 per ounce but below the analysts' estimate of $19.20 per ounce due to its Inmaculada project.

The German bank noted that the company did caution that its guidance was dependent on receiving a permit for the environmental impact assessment at Inmaculada and that, if this was not granted, guidance would need to be revised.

"The permit is expected to be granted at the end of Q1, a minor delay versus previous commentary of within Q1. This remains the key catalyst for the shares," said Berenberg.

RBC Capital Markets initiated coverage of food and beverage outlet SSP at 'outperform' on Wednesday with a 300.0p price target.

"We view SSP as a leader in the global food and beverage concessions market, with a strong space expansion story, particularly in the Americas and APAC," it said.

"Our survey work indicates tailwinds coming through in the travel retail space, and we expect operational leverage to come given a better use of data and digital."

RBC said the stock's valuation remained undemanding compared with pre-pandemic and a global peer group.

Analysts at Canaccord Genuity reiterated their 'buy' rating and 590.0p target price on mission-critical services provider Restore on Wednesday, calling the stock "resilient and misplaced".

Canaccord Genuity noted that Restore had confirmed that its full-year 2022 trading performance was in line with expectations, with balance sheet leverage matching estimates of 1.7x EBITDA and "good" organic momentum delivered in its records management unit.

The Canadian bank also highlighted that Restore's Datashred division also returned to growth, while technology recorded sales growth in excess of 25% year-on-year and saw customer demand and operational efficiency improve during Q4.

"Looking forward, the focus in H1 2023E will be on executing price rises, capturing identified cost savings and driving cash generation through new contract wins," said Canaccord. "Our forecasts, which are unchanged, call for a 10% rise in adj. PBT in FY23E to £45.0m."

Canaccord also stated that M&A could continue to provide upside risk to estimates with the pipeline strong and asset pricing expected to moderate.