Hudbay Minerals Inc. (NYSE:HBM), a leading mining company with a diversified portfolio in base and precious metals, is poised to shine. The company’s robust financial performance, record gold yields, and anticipation of increased copper production at a time when copper prices are expected to surge bode well for investors. The consensus rating of Wall Street analysts indicates a bullish stance on HBM stock, with an attractive upside potential.
Poised to Gain from Copper Exposure
Toronto-based Hudbay Minerals is a mining company that operates across North and South America, with a diversified portfolio specializing in the exploration, development, and optimization of base and precious metals.
Despite the broad range of metals mined by Hudbay, including gold, silver, molybdenum, and zinc, over half of the company’s revenue comes from copper.
The company stands to benefit from an expected surge of 75% in copper prices over the next two years due to a confluence of factors such as disruptions in mining supply, rising global demand for renewable energy, and a forecasted decline in the US dollar.
Recent Results
Hudbay Minerals ended 2023 with a solid financial performance in the fourth quarter, reporting a record revenue of $602.2 million, significantly surpassing the consensus estimate of $552.7 million. The company also reported a net income of $33.5 million, reversing the previous year’s losses. Moreover, it generated a non-GAAP EPS of $0.20, outdoing Wall Street’s expectations of $0.14 and marking a massive improvement from $0.01 in 2022.
The company’s strong results were propelled by record gold yields and a robust copper production of 45,450 tonnes, thanks to increased yields from operations in Peru and Manitoba and the recent acquisition of the Copper Mountain mine in British Columbia.
Outlook for 2024
In its 2024 outlook, Hudbay Minerals projects a 19% increase in consolidated copper production, primarily driven by higher grades in Peru and a full year’s production in British Columbia.
However, consolidated gold production is expected to dip slightly due to decisions made in gold extraction in Peru, including higher-than-planned mining of gold grades in Q4 2023. The company projects an escalation in consolidated cash cost, higher exploration expenditures, particularly in the Snow Lake region, but a 23% drop in total growth capital expenditures in 2024.
Analysts covering Hudbay Minerals stock are bullish on their forecasts for the next 12 months. Most recently, Scotiabank analyst Orest Wowkodaw reiterated a Buy rating on HBM stock with a price target of $8.16. At the same time, Jackie Przybylowski from BMO Capital issued a recent report maintaining a Buy rating with a price target of $6.30.
What is the Price Target for HBM?
HBM currently scores a Strong Buy consensus rating based on eight Buy recommendations versus two Hold ratings. The average price target is $7.12, with a high forecast of $8.53 and a low forecast of $5.00. The average price target represents an upside of 28.29% from the current levels.
Key Takeaways
With strong financial performance showcased in the fourth quarter of 2023, bolstered by record gold yields and robust copper production, Hudbay Minerals is positively positioned for continued growth. The company’s anticipation of an increase in consolidated copper production and consensus bullish forecasts on Wall Street point to a promising outlook.
