Bellevue Gold shares continue slide but analysts optimistic
Make us a preferred source
Make us a preferred source on Google
The news: Bellevue Gold was the worst-performing stock on the ASX in early trading following its quarterly report that noted production hit its guidance midpoint, missing estimates.
The numbers: Bellevue compounded its 5% slide on Monday by opening over 3.6% lower in early trading to $1.86.
The miner said that its production met the midpoint of its guidance range of 75,000 to 85,000 ounces.
Goldman Sachs analysts noted that Bellevue’s liquidity improved by $36 million during the quarter and its gold trading price fell broadly in line with peers. However, while gold production was in line with guidance, it was slightly below the analysts' consensus.
Meanwhile Macquarie analysts pointed to its net debt position of $164 million that was $13.5 million above their estimates for the quarter when accounting for a $10.5 million bullion sale that had not yet hit the balance sheet.
Goldman Sachs analysts set a target price of $2.15, while Macquarie was more conservative at $2.10 due to production volumes falling 3% below their estimates but kept its 'outperform' rating on the stock.
The context: Bellevue’s quarterly report failed to impress traders on Monday, despite meeting the middle range of guidance volumes. With global production reaching new heights, gold began to flatline at its high price during the quarter.
Goldman Sachs analysts rated the miner as a 'buy' as low cost expansions supported production upside.
What they said: "Relative to peers, Bellevue remains relatively underappreciated in our view, where while now trading broadly in line with peers, near term free cash flow yields remain attractive vs. peers and support upside to the outlook for possible future capital returns," Goldman Sachs said.
The sources: Goldman Sachs research, Macquarie research
