Nickel Industries slides as Macquarie cuts earnings forecast
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The news: Nickel Industries was the worst performing ASX 200 company in afternoon trading, after the nickel miner posted a softer-than-expected third-quarter result on Wednesday.
The numbers: Shares were down 6% to 90.8 cents by 2:50pm AEDT, having ended flat in the previous session following its earnings release.
Macquarie retained its 'outperform' rating on Nickel Industries and raised its target price by 9% to $1.04 per share. However, the miner's Q3 result drove a 3% reduction in Macquarie's earnings-per-share estimate for the 2024 calendar year.
Macquarie analysts said Nickel Industries' total EBITDA from operations of USD108.4 million ($165 million) was 17% ahead of consensus estimates, with EBITDA from its Hengjaya and HNC HPAL mines 52% and 121% higher than average forecasts respectively.
However, nickel pig iron production fell 1% short of consensus, while nickel metal production at its rotary kiln electric furnace (RKEF) operations was 10% below expectations.
Elsewhere, Canaccord Genuity kept its 'hold' recommendation on Nickel Industries and maintained its $1-per-share price target. Morgan Stanley retained its 'overweight' rating and $1 price target, after describing the Q3 result as "mixed".
The context: Macquarie analysts noted that after a "difficult" first two quarters of the calendar year, Nickel Industries has delivered a "solid" but "slightly softer-than-expected" third-quarter result, and they expect the positive momentum to continue through to the end of the year.
The sources: Macquarie research, Canaccord Genuity research, Morgan Stanley research
