RE:RE:RE:RE:RE:ChartGeneralAladeen wrote: $9-10 by end of 2023 - not sure where you get those numbers from. Let's make some assumption to arrive at a realistic valuation.
Assume they sell 2.4m tons with a net margin of $50 per ton (currently around $100)
that give us a forward P/ FCF of around 3.60. In mining a good C/FCF ratio is anything under 15x.
So provided the above assumption are correct, we are undervalued by around 4x. So 2023 SP should be $31.20 per share. That is without a growth multiple.
It gets real interesting if they make $100 per ton and more interesting if they do 3m tons. REAL fun when phase 3 expansion of 10m tons. Good luck and hold onto your shares:-)
General, they did $47.50 net per ton in Q2. With downward revised guidance the company is estimating about $40 a ton for Q3 but they also stated they will offer discounts in Q4 and Q1 to "mend fences" for undelivered product during peak season. I also expect them to use well above normal margins as significant leverage to cut into the KCl goliaths share.so I am being more cautious with net margin expectations. I see this opportunity for Verde as an incredibly fortuitous time window of historically well above average MOP prices in which tVerde can undercut competitors in order to rapidly scale up and within that context I expect the company to emphasize volume over price.
Now if the execs of Nutrien and Mosaic are to be believed and the global potash market truly is undergoing structural changes that will result in more resilient MOP pricing for at least the next 3 years then all the better.