Analysts at Raymond James lowered their 2024 commodity price forecast for base metals on Friday to reflect a “more uncertain outlook related to China demand,” however the firm raised its long-term copper price assumption to align with its longer-term thesis of “growing supply shortages in copper reflecting good demand and ongoing challenges (e.g., permitting risks, jurisdictional risks) in developing new supply, lower industry grades and inflationary pressures such as labour.”
At the same time, the group increased its 2024 gold price estimate on “an expectation of a weakening U.S. dollar and lower interest rates .”
“We have updated target prices with our commodity price changes,” the analyst said. “In precious metals, we prefer AEM amongst the senior gold producers for its lower jurisdictional risk profile and steady to growing production profile with a full-year of Canadian Malartic. We also favour EDV for its low cost and attractive valuation. Among intermediate producers, we favour CXB for its strong cash flow and new growth with the potential acquisition of the Valentine gold project. We prefer OR and WPM in the royalty space and SKE amongst juniors for its high grades and near-term potential catalysts, including project financing and an economic study on Snip.”
“For the copper producers, target prices generally increased modestly benefiting from our increased long-term copper price offset by our lower near-term forecasts. We continue to favour IVN and TECK amongst the base metals producers given both have near-term copper growth, long mine lives, and potential catalysts. We also note ERO has organic growth on the horizon with the Tucuma project expected to enter production in 2024. We also remain constructive on uranium and recommend CCO, NXE and DML.”
For their preferred picks, the analysts’ ratings and targets are now:
- Agnico Eagle Mines Ltd. (“outperform”) with a US$71 target, up from US$66. The average on the Street is US$67.02.
- Cameco Corp. ( “outperform”) with a $74 target, up from $71. Average: $70.23.