Boliden (Buy, TP: SEK350.00) - Benefiting from diversification

We reiterate our BUY but have cut our target price to SEK350 (400) after lowering our 2021–2022e adj. EBIT by 5–12% to reflect marked-to-market metal prices and FX. We are 1% below consensus on Q3 adj. EBIT, and believe increased sick leave and Covid-19 restrictions could limit production in the open-pit mines. Our copper production forecast is 11% below consensus. We still like the long-term story, with a higher smelting earnings base from operational improvements and recovering external smelti...

Boliden (Buy, TP: SEK435.00) - Upside potential from hidden value

We have taken a deep dive into the smelting division and believe investment in expanding operations and technical capabilities have lifted the earnings base to the next level, not reflected in consensus and underestimated in the implied smelting valuation of EV/EBIT 6.2x (peers: 8.5x). We forecast Smelter adj. EBIT of SEK4bn for 2022e, 14% above consensus. We have upgraded Boliden to BUY (HOLD) and lifted our target price to SEK435 (355).

BOLIDEN AB sees an upgrade to Slightly Positive due to a better fundam...

The general evaluation of BOLIDEN AB (SE), a company active in the General Mining industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 4 out of 4 possible stars while its market behaviour can be considered as moderately risky. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Slightly Positive. As of the analysis date April 30, 2021, the closing price was SEK 32...

Boliden (Hold, TP: SEK355.00) - Challenges remain

We reiterate our HOLD, but have raised our target price to SEK355 (350) and our 2021–2022e EBIT by 4% to reflect mark-to-market metal prices and FX. We believe challenges will remain in the coming quarters, as Aitik’s grade profile should decline QOQ from Q1, lower TCs are likely to still affect Smelter profits QOQ, and we believe working capital build-up could limit FCF generation in the coming quarters. We forecast a 2021 FCF yield of 5.5% versus peers at 6%. These challenges imply limited tri...

Boliden (Hold, TP: SEK350.00) - Tough quarter ahead

We reiterate our HOLD and have raised our target price to SEK350 (340) after raising our 2021–2022e adj. EBIT by 1–3% to reflect marked-to-market metal prices, FX and production disturbances at Aitik and Tara, corresponding to cSEK325m including our cautious view on Kevitsa in Q1. We forecast production disturbances and falling zinc TCs to have a c13% negative impact on Q1 adj. EBIT QOQ and are 11% below consensus.

Northern Lights

Boliden (Hold, TP: SEK340.00) - Potential upside from Smelters

We reiterate our HOLD and SEK340 target price, reflecting marked-to-market metal prices and FX. Smelters has beaten consensus four quarters running, in our view showing signs of a higher earnings base and stability, offering a re-rating opportunity. However, with a likely earnings headwind for Smelters from falling zinc TCs in 2021e, and limited volume growth in the coming years, we find the stock fairly valued.

Northern Lights

Boliden (Hold, TP: SEK340.00) - Limited triggers ahead

We have downgraded Boliden to HOLD (BUY) but raised our target price to SEK340 (305), as we see few positive triggers ahead, with 1) downside potential to the DPS; 2) limited volume growth in the coming years; and 3) a likely smelter earnings headwind from falling zinc TCs in 2021e. We are 8% above adj. EBIT consensus for Q4 and 14–16% above for 2021–2022. However, trading in line with its historical average to base metal peers, we find the stock fairly valued.

Northern Lights

Northern Lights

Boliden (Buy, TP: SEK305.00) - Good value to warrant re-rating

We reiterate our BUY and SEK305 target price, reflecting marked-to-market metal prices and FX. Following higher than expected capex guidance for 2021 and lower operational guidance, we keep our 2020–2021e adj. EBIT virtually unchanged. Nonetheless, we believe Boliden offers good value as we expect strong Q4 cash flow to lead to a total dividend of SEK13 (yield: 5%), which we believe could warrant a re-rating of the stock from its 20% discount to its historical P/E on our 2021e EPS.

Northern Lights

Boliden (Buy, TP: SEK305.00) - Capex update set to be in focus

We have raised our 2020–2021e adj. EBIT by 7% on marked-to-market metal prices and FX, and expect a solid Q3 report (due 28 October). We forecast earnings up 39% QOQ, mainly driven by higher net metal prices and FX, and seasonally lower costs, partly offset by lower volumes and maintenance stops. We are 5% above Factset consensus on adj. EBIT. In our view, the main focus is set to be the capex update; we note capex is running below the SEK7bn guidance. We reiterate our BUY, and have raised our t...

Northern Lights

Boliden (Buy, TP: SEK290.00) - EPS momentum not reflected in valuation

We reiterate our BUY and have raised our target price to SEK290 (250), reflecting marked-to-market metal prices and FX. Boliden is gaining earnings momentum into Q3 and we believe onwards, and we see significant potential upside to consensus that could raise 2020 EPS by 25%, which, given the solid balance sheet, could in our view be distributed to shareholders despite the potential Odda capex project.

Northern Lights

Boliden (Buy, TP: SEK250.00) - Gold Digger

We believe Q2 results will be mostly unaffected by the Covid-19 pandemic: we expect stable earnings QOQ driven by higher zinc production, while Aitik gold grades should normalise in Q2 to meet reserve grades in 2020, not reflected in consensus. In our view the stock is a good rebound case as one of few stocks in the space with attractive short-term multiples that seem not priced in at a record discount versus the OMXS30. We reiterate our BUY and have raised our target price to SEK250 (240).

Northern Lights

Boliden (Buy, TP: SEK240.00) - Value story intact

We reiterate our BUY and have raised our target price to SEK240 (235), reflecting marked-to-market metal prices and FX. Even though Boliden kept its 2020 capex outlook and working capital build-up could hinder cash flows, we believe the value story is intact. Boliden is in our view one of the few companies in the sector with acceptable 2020e multiples and set to pay dividends; the stock is trading at a P/E of 9.7x and FCF yield of 6%. We have lifted our 2020–2021e EBIT by c5–8%.