RE:Analyst PredictionsThe Globe and Mail reports in its Thursday, May 26, edition that National Bank analyst Shane Nagle thinks demand concerns and issues concerning near-term supply growth are overshadowing "compelling" valuations and "supportive" long-term fundamentals for TSX-listed copper equities, such as Hudbay Minerals.
The Globe's David Leeder writes that Mr. Nagle now sees equities in the sector as "attractively priced" following recent struggles. He says, "Copper equities in our coverage are down an average of 24 per cent over the past month and while macro headlines are expected to dictate near-term performance, commodity prices continue to support favourable valuations and strong cash flow.
" Mr. Nagle rates Hudbay "outperform," with a $11.50 share target, $1.28 under the consensus. Mr. Nagle says in a note: "Elevated coal prices continue to drive strong FCF margins while completion of QB2 in H2/22 will drive growth of the copper business, leading to further increases in shareholder returns.
Elevated oil prices have driven a significant inflection point in the value of Fort Hills and several advancements of non-core projects like San Nicolas, Masaba and Zafranel may lead to a number of non-core assets being monetized."