Given the inevitable grade decline as the Cadia mine matures, Deutsche Bank believes the company’s best organic growth opportunity is expanding Cadia to maintain over 500,000 ozs per annum run rate for the next 10 years.
The broker has made a deep study of Cadia which suggests it is highly accretive and notes Newcrest has made significant inroads into paying off debt. While there are upcoming catalysts, the broker considers the stock expensive.
Deutsche Bank retains a Sell rating and raises the target to $19.00 from $13.10.
Target price is $19.00.Current Price is $23.99. Difference: ($4.99) – (brackets indicate current price is over target). If NCM meets the Deutsche Bank target it will return approximately -26% (excluding dividends, fees and charges – negative figures indicate an expected loss).