Macquarie’s Commodities Strategy team has upgraded its short term nickel price forecasts by 7-8%, medium-term by 10-13% and long-term by 3%.
As one would expect, these changes translate to material earnings estimates upgrades for Australian Nickel Miners. Western Areas and Nickel Mines remain the broker’s preferred pure play producers.
Western Areas’ rating remains Outperform with a price target of $3.30, up from $2.80, on a significant rise in earnings and DPS forecasts.
Target price is $3.30.Current Price is $2.88. Difference: $0.42 – (brackets indicate current price is over target). If WSA meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).