Evolution downgraded on lower production volumes: analysts
Make us a preferred source
Make us a preferred source on Google
The news: Morningstar analysts have downgraded their rating for Evolution Mining, with expectations that the gold miner will land at the lower end of its production range guide, and lower forecast sales from its Red Lake mine in Canada.
The numbers: The research house modestly reduced its fair value estimate to $2.90, from $3, given the company’s weaker than expected performance in the first half of fiscal 2024.
While Evolution reiterated its guidance in January, Morningstar analysts said they thought the company was likely to only achieve the lower end of its guided production range, at about 740,000 ounces.
Morningstar also lowered forecast sales from its Red Lake mine in Canada due to ongoing production issues at the mine.
Shares in Evolution lowered in morning trading, dropping 1% to $3.44 by 11:40am AEDT.
The context: Evolution shares finished around 5% higher at the close of trading on Thursday, after rising gold prices saw a surge by gold miners across the ASX.
Morgan Stanley analysts upgraded its rating on Evolution to 'overweight' from 'equal weight' and raised its target price. The analysts said Evolution had the lowest implied gold price and therefore had "the largest upside to spot gold prices" within its coverage.
The source: Morningstar research
