RE:Fundamental Research Report, targets $11:94/shr Thanks Madman, a very useful post and link to this research note. I see it is dated 7th January. Would this have been before Verde announced it 2022 and 2023 guidance? This report estimates a $11.94 per share value, yet it predicts an EPS in 2022 of $0.23 when of course the company is now guiding to $0.50. I know that this $11.94 value is based on far more than just the 2022 and 2023 EPS. It would interesting to see if these analysts will now change their price target following the company's recent announcement.
This $11.94 is a touch higher than John Kaiser's $10 current estimate, but close enough, and that ball park is starting to looking increasingly likely in the next couple of years on the basis of Verde guidance and this sort of research analysis. If Verde's prediction of $0.50 EPS comes off on 700,000 tonnes then one can guesstimate $1 on 1.4m tonnes. With so much growth potential beyond 1.4m I would have thought a PE of 10 times isn't a stretch.
On the other hand a $50 share price seems extraordinary right now, but possible if sales reach 20m+ tonnes at $15 of profit per tonne. That's $300m profit on 20m tonnes, divided by 55m shares (there will be some shares awarded to the CEO and staff) equals $5.45 of EPS. Put that on a PE of 10, then $54. So why not. The profit per tonne on this basis is less than currently but that makes sense given the sensational prices achieved at the moment.
On John Kaiser's $100 figure, I think he is perhaps working on 25m tonnes and a more permanent uplift in prices. A very top end estimate, but longer term, given the mine life, paerhaps. Will be very happy with a $50 share price though!!