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First Quantum Minerals: Analysts See More Returns

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First Quantum

First Quantum Minerals (FM) has risen 44% this year based on its closing prices on February 26. Freeport-McMoRan (FCX) and Southern Copper (SCCO) have risen 28.4% and 22.7% respectively, during the same period. Looking at First Quantum Mineral’s consensus target price, analysts see a 26.4% upside from these levels.

First Quantum Minerals received a “strong buy” rating from eight analysts, while 12 analysts gave it a “buy” rating. The remaining four analysts polled by Thomson Reuters gave First Quantum a “hold” or equivalent rating.

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Analysts’ action

First Quantum Minerals released its fourth-quarter earnings on February 14. Brokerages seem to have a mixed view of the results. TD Securities lowered First Quantum’s target price by 2 Canadian dollars to 24 Canadian dollars after its earnings release. Canaccord Genuity, J.P. Morgan, and BMO also lowered First Quantum’s target price after its fourth-quarter earnings. However, Citi is bullish on copper. Citi raised the stock’s target price from 14 Canadian dollars to 18 Canadian dollars. On February 22, CIBC raised First Quantum’s target price from 16 Canadian dollars to 17 Canadian dollars.

Fourth-quarter earnings

First Quantum’s copper production rose 2.5% year-over-year in the fourth quarter and 5.6% in fiscal 2018. However, the company’s all-in sustaining costs rose from $1.65 per pound to $1.74 per pound between 2017 and 2018. First Quantum reported an EPS of $0.29 in the fourth quarter and $0.64 in 2018. The company posted an EPS of -$0.17 in the fourth quarter of 2017 and -$0.46 in 2017. First Quantum’s operating cash flows more than doubled last year.

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