Kingsgate posted a positive production result, featuring improvement at Chatree, solid production at Challenger and progress on development projects, the broker notes. Guidance was reiterated and the balance sheet has improved slightly. The increased share count leads to an 8% fall in forecast earnings and the target falls to $1.00 from $1.40.
While KCN is clearly improving, the broker still sees too much of a gap between ambitions and funding ability. Underperform retained.
Target price is $1.00.Current Price is $1.16. Difference: ($0.16) – (brackets indicate current price is over target). If KCN meets the Macquarie target it will return approximately -15% (excluding dividends, fees and charges – negative figures indicate an expected loss).