Source: Streetwise Reports 12/13/2018
A BMO Capital Markets report summarized the investment thesis for this company.
In a Dec. 7 research note, analyst Andrew Kaip reported BMO Capital Markets initiated coverage on Newcrest Mining Ltd. (NCM:ASX) with a Market Perform rating and an AU$23 per share target price. The stock is currently trading at around AU$20.67 per share.
“Newcrest meets BMO’s criteria for a best-in-class mining company,” Kaip noted, with “strong execution and above average outlook in addition to peer-leading returns since restructuring began four years ago and industry-leading asset base and reserve life.”
Company risks include concentration of assets, decreasing gold production at Cadia as of 2020 and heightened jurisdictional risk with Ecuador exposure and surrounding development of Wafi-Golpu, the joint venture project in Papua New Guinea.
In light of these issues, Newcrest is “reasonably valued,” Kaip noted. The company could trade at a premium valuation, but that would require it to add to its asset portfolio to increase production and lower jurisdictional risk.
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Disclosures from BMO Capital Markets, Newcrest Mining, December 7, 2018
IMPORTANT DISCLOSURES
Analyst’s Certification
I, Andrew Kaip, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Company Specific Disclosures
Disclosure 16: A research analyst has extensively viewed the material operations of Newcrest Mining.
Disclosure 17: Newcrest Mining has paid or reimbursed some or all of the research analyst’s travel expenses.
Disclosure 18: A redacted draft of this report was previously shown to Newcrest Mining (for fact checking purposes) and changes were made to the report before publication.
For Important Disclosures on the stocks discussed in this report, please click here.
( Companies Mentioned: NCM:ASX,
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