NCM - Citi rates the stock as Buy, Medium Risk
BY BROKER NEWS - 29/01/2010
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• NCM - NEWCREST MINING LIMITED
Citi notes gold and copper production rebounded strongly in the December quarter and while group gold fell a tad short of the broker's estimates, it is still comfortable with its FY10 forecasts.
The highlight of the result, notes Citi, was the "outstanding" performance on costs, which was aided by strong copper by-product credits.
The production outcome combined with gold and copper prices see the broker raise its FY10 underlying earnings estimate by 12%, noting that at current spot gold, copper and AUD, the upside to its new base case forecasts is around 20-50%.
The stock remains Citi's preferred pick of the gold stocks and the Buy call is unsurprisingly maintained. Sector: Materials.
Target price is $37.70.Current Price is $32.13. Difference: $5.57 - (brackets indicate current price is over target). If NCM meets the Citi target it will return approximately 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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