SSR Mining’s guidance for 2021 proved in-line with UBS’s forecasts, but costs are expected to be higher and more investments are on the agenda (some $100m more).
The broker explains projected free cashflow is a key component of its Buy thesis. It sees the stock trading on circa 12% FCF yield currently.
As UBS only models a 3% dividend yield, the broker believes there is material upside risk to potential investment returns. Valuation has dropped due to a stronger Aussie dollar.
New price target of $28 compares with $30 previously. Buy rating retained.
Target price is $28.00.Current Price is $22.90. Difference: $5.10 – (brackets indicate current price is over target). If SSR meets the UBS target it will return approximately 18% (excluding dividends, fees and charges – negative figures indicate an expected loss).