BMO Capital analyst Raj Ray maintained a Hold rating on Centerra Gold on September 11 and set a price target of C$14.00.
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Raj Ray has given his Hold rating due to a combination of factors related to Centerra Gold’s recent developments and future prospects. The extension of the mine life at the Mt Milligan site by ten years and the anticipated increase in production are positive indicators, contributing to a significant rise in the net present value (NPV) of the project. However, the execution and operational delivery remain crucial, especially given the company’s past underperformance and the need for consistent operational results in the coming quarters.
While the optimization initiatives, such as the addition of a second tailings storage facility (TSF) and improvements in mining efficiencies, present opportunities for growth, they also introduce certain risks. The necessity for permits and approvals, particularly from First Nations, adds an element of uncertainty. Additionally, the recent operational volatility and the company’s performance relative to its peers suggest that further clarity and stability are needed before a more favorable rating can be considered. As a result, a Hold rating is deemed appropriate until more consistent performance is demonstrated.
In another report released on September 9, RBC Capital also downgraded the stock to a Hold with a C$14.00 price target.