Canaccord cuts Acacia Mining to 'sell' from 'hold'
Acacia Mining was under the cosh on Friday after Canaccord Genuity cut its rating on the stock to 'sell' from 'hold' but lifted the target price to 505p from 495p.
Acacia Mining
234.00p
16:45 16/09/19
FTSE 250
20,522.81
16:38 14/11/24
FTSE 350
4,459.02
16:38 14/11/24
FTSE All-Share
4,417.25
16:54 14/11/24
Mining
10,475.37
16:38 14/11/24
Canaccord said the miner has performed well since reporting disappointing 2015 results, particularly in the second quarter.
The company now expects gold production at or above the upper end of its 750-780,000 ounce (oz) guidance range, and All-in Sustaining Costs (AISC) at the lower end of its $960-980/oz range. Canaccord expects 794,000oz and $944/oz.
The broker has also upgraded its 2016 EBITDA estimate from $351m to $419m and earnings per share forecast from 35c to 41c.
Canaccord noted recent reports that have suggested that Barrick Gold Corp was looking to sell its stake in Acacia. But the broker believes Acacia is "too expensive" given a challenging market for gold miners.
"With a share price of almost 600p, and an upwardly revised target price of only 505p, and with little prospect of a near-term sale of Barrick's 63.9% stake in our view, we downgrade our recommendation from 'hold' to 'sell'. We like what the company has achieved so far this year, but believe that it is more than in the share price already."