Broker tips: Taseko Mines, Morgan Sindall
By Iain Gilbert
Date: Tuesday 06 May 2025
(Sharecast News) - Analysts at Canaccord Genuity lowered their target price on copper producer Taseko Mines from 305.0p to 290.0p on Tuesday as it updated its model on the stock following the group's Q125 numbers.
Taseko's Q125 earnings revealed that production was in line with expectations, but the group also offered up "a less optimistic outlook" for its Gibraltar operations in 2025. Production of 20.0m pounds of copper was in line, while copper sales of 21.8m lbs, C1 costs of USD $2.26/lb and total site costs of CAD $107.0m beat estimates. However, adjusted underlying earnings of CAD $34.0m fell short as the use of stockpiles led to a "large" inventory movement for the quarter.
The Canadian bank also noted that Taseko's management elaborated on the reason for the downgrade in guidance at Gibraltar to 110-120m lbs from 120-130m lbs, explaining that the "overburden" surrounding the upper benches of its Connector pit was "more challenging than expected", leading to lower mining rates.
"We have updated our estimates for the 1Q25 release, and the lower production expectation for Gibraltar. We now assume 111m lbs (the lower end of the guidance range) for FY25, and expect a spike in C1 costs in 2Q25 to US$2.69/lb (as a higher proportion of mining costs are expensed rather than capitalised). Our FY25 EBITDA estimate is now -13% lower, and our NAV/share has fallen to 386p/C$7.07 (from 416p/C$7.55). We lower our target price to 290p/C$5.30 (from 305p/C$5.55). We use a combination of 12-month forward EBITDA growth and 1x P/NPV (rounded to the nearest 5p) in setting our target price," said Canaccord Genuity, which reiterated its 'buy' rating on the stock.
Over at Berenberg, analysts reiterated their 'buy' rating on construction firm Morgan Sindall on Tuesday after the group issued a trading update.
Berenberg said management confirmed that year-to-date trading has been "encouraging" and "better" than originally expected - and said its current year performance was predicted to be in line with current expectations.
The German bank stated that Morgan Sindall's share price had largely recovered from its February to March lull, although Berenberg continues to believe "there is more growth to follow in time", given the various options Morgan Sindall's portfolio structure provides.
"We increase our EPS by 1-2% across the forecast period to reflect our latest view on the mix of business performance in the coming years," said Berenberg, which reiterated its 4,500.0p price target on the stock, which currently trades at a 12.3x FY 2025 price-to-earnings ratio, a 6.8x EBITDA and 8.0x EBIT.
Reporting by Iain Gilbert at Sharecast.com
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