NVX – Morgans rates the stock as Add

The company is in the final stages of fitting out new premises and expects to commission its first 500tpa of equipment in the current quarter. The first anode contract is expected in the third quarter of FY20.

Novonix has written down the value of its non-core Mt Dromedary deposit and the BTS business by -$11m and -$5m, respectively.

Morgans still believes there is potential value in Mt Dromedary, should it be sold, but based on values of listed graphite peers reduces assumed value.

Growth assumptions for BTS are also reduced in line with inflation. Speculative Buy (Add) rating maintained. Target is reduced to $0.65 from $0.75.

Sector: Materials.

Target price is $0.65.Current Price is $0.44. Difference: $0.21 – (brackets indicate current price is over target). If NVX meets the Morgans target it will return approximately 32% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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