Capricorn shares dip on earnings miss, but analysts upgrade
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The news: Shares in Capricorn Metals edged lower on the ASX after the gold miner's full-year earnings fell short of forecasts, but analysts upgraded their ratings on the stock due to its promising growth outlook.
The numbers: Capricorn reported FY24 operating EBITDA and underlying EBITDA of $184 million and $168 million respectively, both around $18 million below consensus expectations. Earnings were weighed down by operating costs that were $19 million higher than expected.
NPAT of $87 million was 13% short of average estimates, while the miner's net cash position of $36 million was $13 million softer than consensus.
Macquarie upgraded Capricorn to 'outperform' and lifted its target price 19% to $6.30 per share. It also made earnings per share (EPS) upgrades of 9% in FY26 and an average of 24% between FY27 and FY30.
Jarden retained its 'buy' rating on the stock and raised its target price marginally from $6.28 to $6.29.
Capricorn shares were down 1.8% to $5.49 by 2:30pm AEST, having gained 25% over the last 12 months.
The context: Macquarie analysts said that the planned mill expansion at Capricorn's Karlawinda gold project, and a possible underground development at Mount Gibson, was cause for EPS upgrades beyond FY25.
Jarden analysts noted that Capricorn's "track record of execution and cost management" should see it outperform its peers in the medium- to long-term.
What they said: Capricorn executive chair Mark Clark said: "Capricorn completed a strong third year of operations at Karlawinda despite the impact of a number of rainfall events in the second half of the financial year".
"FY25 is expected to be another strong year for the [Karlawinda] operations and will see Capricorn continue to push the exciting Mt Gibson project towards development," he said.
"[Capricorn] has delivered consistently at Karlawinda for [over] three years, whilst Mt Gibson's potential has seemingly been over the horizon," Macquarie analysts said.
"However, with Mt Gibson nearer and Karlawinda's reserves underpinning a relatively near-term plant expansion, we now see clear positive catalysts ahead," they said.
The sources: ASX announcement, Macquarie research, Jarden research
