Scotia Capital analyst Orest Wowkodaw also expects “robust” first-quarter results from miners in the coming weeks.
“We do not anticipate material changes to 2022 production guidance but are wary of growing cost inflation and the resulting negative impacts to opex and capex guidance,” he said in a research report. “However, despite these inflationary impacts, we anticipate most miners to continue generating strong FCF, supporting improving shareholder return initiatives ahead.”
“Our Q1/22 EPS and EBITDA estimates appear somewhat mixed relative to current consensus expectations. Once again, positive PP adjustments are expected to serve as a tailwind for many. For the large and mid-cap producers, our EBITDA estimates are on average 4 per cent below consensus. However, our EBITDA estimates are 5 per cent above consensus for the small caps.”
Mr. Wowkodaw made target changes to four TSX-listed stocks on Tuesday.
He raised his targets for:
- Hudbay Minerals Inc. (HBM-T, “sector outperform”) to $12.50 from $12. Average: $13.42.
- Turquoise Hill Resources Ltd. (TRQ-T, “sector perform”) to $43 from $42. Average: $39.42.
- Teck Resources Ltd. (
, “sector outperform”) to $64 from $63. Average: $55.38.
He lowered his Taseko Mines Ltd. (
target to $1 from $1.50 with a “sector underperform” rating. The average is $3.35.
“In our view, CCO-T, CIA-T, FCX-N, FM-T, IVN-T, and TECK.B-T all appear fairly well positioned heading into the Q1 reporting season,” he said.