NCM – Citi rates the stock as Buy

Citi analysts highlight their preferred gold exposures in the Australian share market as US election uncertainty dominates. Buy-rated stocks Newcrest and Northern Star ((NST)) are most preferred. In the analysts own words, "for operational and financial quality as well as mid-range FCF/EPS sensitivity to gold price".

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Newcrest Still Chasing That Cash Flow

Brokers are not convinced that Australia’s largest gold miner, Newcrest Mining (NCM), can overcome the odds and deliver positive free cash flow by the second half of FY14. The company’s first half results were largely within expectations, given the recent detailed second quarter production report. Still, operating cash flow fell short of many forecasts and remains the pivotal point in assessing the outlook.

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NCM – UBS rates the stock as Sell

Newcrest has reported September quarter output of 587,000 ounces, 11% above UBS’ expectations. Reconciling the report has lifted FY14 forecasts by 3% to 2.34m ozs and the broker suspects this may be exceeded. Despite higher production expectations forecasts for FY14 earnings have been reduced by 17%, largely because of an increase in the FX assumption to US93c.

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