Broker tips: Auction Technology, Pod Point, Endeavour Mining, Centamin, Pan African Resources

By Iain Gilbert

Date: Tuesday 05 Dec 2023

Broker tips: Auction Technology, Pod Point, Endeavour Mining, Centamin, Pan African Resources

(Sharecast News) - Barclays downgraded Auction Technology on Tuesday to 'equalweight' from 'overweight' and slashed its price target on the stock to 600.0p from 880.0p.
The bank said that while it remains constructive on the long-term structural growth of ATG, it is now more cautious on the near-term cyclicality of the business.

"Management guidance expects no further deterioration in end-markets, but after two top-line misses in a row we prefer to see proof in the numbers," it said.

Barclays added that at 17x 2024 price-to-earnings, the valuation is not cheap.

Analysts at Canaccord Genuity lowered their target price on electric vehicle charging solutions provider Pod Point from 70.0p to 60.0p on Tuesday following the group's maiden capital markets day in November.

Canaccord Genuity said its main takeaway from Pod Point's CMD was that it has "strongly positioned" itself as a grid flex provider, touching multiple different routes for the service, beyond its EV roots.

"Services and businesses that do not support flex have been explicitly discontinued or earmarked for sale, and the potential for flex provision via new routes was highlighted - notably grid-connected batteries and international chargepoint sales," said Canaccord, which reiterated its 'buy' rating on the stock.

The Canadian bank highlighted that equally critical was the support of major shareholder EDF, both for the strategy and via a £30.0m credit facility, which it expects to be used from mid-2025 onwards ahead of free cash flow in 2027.

With that said, Canaccord revised its forecasts to match new guidance, noting a "slight upgrade" to 2023 expectations being offset by "a much slower earnings ramp" over the next few years, largely down to continued losses in the EV chargepoint installation business.

Berenberg has highlighted its top 'buys' across the UK-listed gold mining sector after bullion prices rose to a record $2,100 an ounce.

Firstly, for those looking at large caps, it rates Endeavour Mining a 'buy', calling out its expected production growth in 2024 and 2025, and so-called all-in sustaining costs of under $1,000/ounce.

For investors interested in turnaround stories, Berenberg thinks it's time to own Centamin shares after a 9% year-to-date fall. Shares have performed well recently as the miner starts to generate free cash flow from its Sukari mine in Egypt after a period of investment. There is exploration upside elsewhere too.

The broker also highlighted Pan African Resources due to weakness in the South African rand, which should be supportive to the company from a USD cost basis. The company also offers low-cost growth from the Mintails project in SA and is expected to hit operational guidance.


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