Morgans suggests a unique opportunity has arisen to acquire Stanmore Resources shares, following a share price fall on fears around global steel activity. It’s thought profit-taking from the March entitlement offer and confusion around royalty impacts are weighing.
The QLD government announced a big royalty hike for local coal miners and while this results in -US$146m in royalties over 2022-23, net present value impacts are modest, explains the analyst. Upside leverage to the coal price is crimped, but not dramatically.
The broker lowers its target price to $3.35 from $3.80 and the Add rating is unchanged.
Target price is $3.80.Current Price is $1.79. Difference: $2.01 – (brackets indicate current price is over target). If SMR meets the Morgans target it will return approximately 53% (excluding dividends, fees and charges – negative figures indicate an expected loss).