Analyst Ratings Coverage
Scotia Capital’s (Rank#7) issued research report on Tuesday November 14th, and lower the 12 month target price to CAD 20 from $23 . The analyst also maintained their “Sector Perform” rating on the stock and sees the company’s performance aligning with the broader sector, without a significant outperformance or underperformance expected.
BMO Capital Markets (Rank#10) also decreased the target price to CAD 30 from $40, and kept their “Outperform” rating unchanged.
First Quantum Stock Analysis
According to the consensus forecast of 17 analysts, the average target price for First Quantum Minerals Ltd (FM) in the next 12 months is projected to be CAD 31.97. Analysts’ assessments of the stock suggest a Hold rating on average.
Stock Target Advisor, after conducting its own analysis, classifies First Quantum Minerals Ltd as Slightly Bullish. This classification is derived from an evaluation of 10 positive signals and 7 negative signals related to the company’s performance and market indicators.
As of the latest closing, the stock price of First Quantum Minerals Ltd stood at CAD 15.65. Over the past week, the stock has experienced a decline of -7.89%, while over the last month, the decrease has been more substantial at -49.34%. Looking at the stock’s performance over the last year, there has been a significant drop of -52.95%.
First Quantum Fundamental Analysis
Positive Aspects:
- Superior Risk-Adjusted Returns: First Quantum Minerals Ltd has demonstrated superior risk-adjusted returns compared to its sector peers, positioning it in the top quartile. This suggests that, over a hold period of at least 12 months, the stock has performed well in terms of risk-adjusted performance.
- Positive Cash Flow: The company has generated positive total cash flow in the most recent four quarters, indicating its ability to generate cash from its operations.
- Positive Free Cash Flow: First Quantum Minerals Ltd has produced positive total free cash flow in the most recent four quarters, highlighting its ability to generate cash after covering operating expenses and capital expenditures.
- Superior Return on Assets: The company’s management has delivered a better return on assets in the most recent four quarters compared to its peers, placing it in the top quartile. This suggests efficient asset utilization.
- Superior Capital Utilization: First Quantum Minerals Ltd has demonstrated superior return on invested capital in the most recent four quarters compared to its peers, indicating effective use of capital.
- High Market Capitalization: Being one of the largest entities in its sector and among the top quartile, First Quantum Minerals Ltd is likely to exhibit more stability.
- Superior Revenue Growth: The stock has shown top quartile revenue growth in the previous five years compared to its sector, indicating strong business performance.
- Superior Earnings Growth: First Quantum Minerals Ltd has exhibited top quartile earnings growth in the previous five years compared to its sector, reflecting positive financial performance.
- Underpriced Compared to Earnings: The stock is trading at a low price-to-earnings ratio compared to its peers and is in the top quartile. This may suggest that it is undervalued, but investors should verify its financial performance for confirmation.
- Superior Return on Equity: The company’s management has delivered better return on equity in the most recent four quarters than its peers, placing it in the top quartile.
Negative Aspects:
- Overpriced Compared to Book Value: The stock is trading at a high valuation compared to its peers’ median on a price-to-book value basis.
- Below Median Total Returns: First Quantum Minerals Ltd has underperformed its peers in terms of annual average total returns over the past five years.
- High Volatility: The total returns for the company are volatile and above the median for its sector over the past five years. Investors should consider their risk tolerance when investing in such a stock.
- Overpriced on Cashflow Basis: The stock is trading at a high valuation compared to its peers on a price-to-cash flow basis, being priced above the median for its sector.
- Low Dividend Growth: First Quantum Minerals Ltd has shown below-median dividend growth in the previous five years compared to its sector.
- Highly Leveraged: The company is positioned in the bottom half compared to its sector peers on the debt-to-equity ratio, indicating higher leverage. This could be due to aggressive growth strategies.
- Overpriced on Free Cash Flow Basis: The stock is trading at a high valuation compared to its peers on a price-to-free cash flow basis, being priced above the median for its sector. Investors should exercise caution when considering buying.
