Boliden (Buy, TP: SEK320.00) - Better times ahead
We have made hefty estimate cuts and lowered our target price to SEK320 (380) on reduced FX and metal price assumptions. Near-term, low metal grades from key mines and modified operations at the Rönnskär smelter are set to weigh on earnings. However, we continue to expect a sharp increase in earnings from 2025 on: 1) higher volumes due to richer metal grades; 2) normal operations at Rönnskär; and 3) growing profits from the Odda smelter. Our spot-based forecasts for 2027 translate to an EV/EBIT of 7.4x, but we see significant upside potential to our spot-based forecast, as we believe the price outlook for copper and gold is rosy. BUY.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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