Polymetal - Strong 2Q19 Trading Update, TP Raised on Positive Gold Outlook
Polymetal has reported a strong 2Q19 trading update, with production results suggesting 3-4% upside to its full-year output guidance. We anticipate a strong set of financial results, forecasting 1H19 EBITDA rising 31% y-o-y to $400 mln, for a 42% margin. We have incorporated an updated $1,400/oz gold price forecast for 2020 into our model and run a scenario-based valuation with a gold price of $1,500/oz in the bull case. We raise our target price by 8% to $14.20/GBP11.42 per share and reiterate our BUY recommendation.Polymetal International is the ultimate parent entity of Polymetal Group, a precious metals mining group operating in Russia, Kazakhstan and Armenia. Co. has five reportable segments: Magadan; Ural; Khabarovsk; Kazakhstan; and Armenia. Each segment is engaged in gold, silver or copper mining and related activities, including exploration, extraction, processing and reclamation.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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