RE: Analyst see the potential for a $5.00 to $10.0 ICP offers excellent value in our opinion trading at less than 4% of the project’s value as per the prefeasibility study and one-fifth the value of its closest peer (LSE:SXX). IC Potash has an enterprise value of only $54 million versus the prefeasibility NPV of $1.3 billion for the base case ($2.0 for the expansion case). Sirius Minerals current enterprise value is $295 million. Valuing IC Potash in line with Sirius Minerals would equate to a $2.02 ICP share price whereas one could argue that ICP is worth even more on a relative basis given its relative strengths.
We reiterate our STRONG BUY rating and C$2.00 target price. We base our target on a 0.5x multiple applied to our NAV calculation using a 12% discount rate. We expect upside to our target as the project is de-risked through the completion of feasibility. We see the potential for a $5.00 to $10.00 share price in the long term.