EVN – Ord Minnett rates the stock as Hold

Both production and costs were below guidance in the December quarter. The company has also flagged a potential downgrade to the resource at Mount Carlton and water security issues at Cowal.

Recent drilling at Mount Carlton has led to a revised interpretation of the mineralisation, with ore tapering more quickly than previously envisaged. Ord Minnett had assumed a nine-year mine life, producing around 1m ounces but this may turn out to be optimistic.

Moreover, if drought conditions continue in NSW, Cowal, which is already under stage 3 restrictions, may face further reduced access to water, Ord Minnett notes. The broker maintains a Hold rating and $4 target.

Sector: Materials.

Target price is $4.00.Current Price is $3.58. Difference: $0.42 – (brackets indicate current price is over target). If EVN meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).

About Broker News

FNArena's Australian Broker Call, is your daily news report on the latest recommendation, valuation, forecast and opinions recently published by Stockbrokers.

View more articles by Broker News →