TGS – Macquarie rates the stock as Underperform

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Macquarie rates the stock as Downgrade to Underperform from Outperform

December quarter production was in line but costs were well above what the broker expected. Phase 2 appears unfundable from here, in Macquarie’s view.

Macquarie downgrades earnings forecasts for FY15. Forecasts for FY16 rise 20% as the broker now assumes an improvement in the availability of grid power.

The broker still believes Kipoi copper is an attractive project but its development is jeopardised by the company’s balance sheet.

Rating is downgraded to Underperform from Outperform and the target is 3c.

Sector: Materials.

Target price is $0.30.Current Price is $0.05. Difference: $0.25 – (brackets indicate current price is over target). If TGS meets the Macquarie target it will return approximately 84% (excluding dividends, fees and charges – negative figures indicate an expected loss)

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