stockwatch Globe says New Gold seen more as seller than buyer
2022-01-19 08:20 ET - In the News
The Globe and Mail reports in its Wednesday, Jan. 19, edition that Canaccord analyst Dalton Baretto has lowered his recommendation for New Gold to "hold" from "buy." The Globe's David Leeder writes in the Eye On Equities column that Mr. Baretto trimmed his share target to $2.25 from $2.85. Analysts on average target the shares at $2.47. Mr. Baretto says in a note: "The operating challenges of 2021 have clearly brought back the ghosts of operating issues past and lowered the market's perception of the quality of these assets. As such, a primary goal for management in 2022 will be to deliver a series of strong operating results that leverage the full capability of the mines. A secondary (but no less important) goal will be to better define the longer-term future of the business -- New Afton continues to tread water from a FCF perspective as the bulk of the operating cash flow gets reinvested in development, while Rainy River faces existential questions past the cessation of mining from the open pit in early 2025. As such, we believe there is a high probability of M&A activity in 2022, and we believe management are likely sellers rather than buyers."