Peru situation an "overhang" for Hudbay Peru situation an "overhang" for Hudbay
Hudbay Minerals Inc (C:HBM)
Shares Issued 261,517,129
Last Close 8/10/2021 $8.24
Wednesday August 11 2021 - In the News
The Globe and Mail reports in its Wednesday, Aug. 11, edition that iA Capital Markets analyst George Topping believes Hudbay Mineral is "undervalued." The Globe's David Leeder writes in the Eye On Equities column that Mr. Topping notes, however, that Hudbay's key holdings in Peru face significant political obstacles. Nonetheless, he continues to rate the shares "buy," even while shaving his share target by $1.85 to $12.90.
Analysts on average target the shares at $13.44.
Mr. Topping says in a note: "The political situation in Peru remains an overhang for the stock. While President Castillo has made moderate speeches, his cabinet appointments show a harder left-wing agenda. The populace and Congress are divided 50:50 and this non-reconciliatory approach increases the chances of unrest. Peru could be plunged back into a constitutional crisis. The base case remains increasing taxes (in spite of a tax agreement to 2031) but there is significant tail risk. ... With production growth, unhedged commodity price exposure and the NB mill commissioned, the company has navigated the difficult pending closure of 777. ... Hudbay has a cash balance of $300-million with debt of $1.2-billion."