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Silvercorp Reports Fiscal Q1-2023 Production Results; Shares Down 1.3%

Story Highlights

Silvercorp mostly saw production increases when compared to the first quarter of 2021. It will be interesting to see if this can translate into an earnings beat in August, as the company does not have a good track record of beating earnings.

Sivercorp Metals (SVM) (TSE: SVM) recently announced operating results for its first quarter of Fiscal 2023. The company mostly saw production increases when compared to Fiscal Q1 2022.

Silver, gold, and lead production saw growth year-over-year, as it increased 26%, 10%, and 20%, respectively. This equates to 1.9 million ounces of silver, 1,100 ounces of gold, and 19.1 million pounds of lead.

On the other hand, the company also produces zinc, and unlike the other metals, production decreased year-over-year by 4%. This means that Silvercorp produced 6.9 million pounds of zinc.

In addition, the company offered investors production guidance and expects to produce 7 million to 7.3 million ounces of silver, 6,300 to 7,900 ounces of gold, 68.4 million to 71.3 million pounds of lead, and 32.0 million to 34.5 million pounds of zinc. It also expects to release its financial results for the quarter on August 11.

Investors are Optimistic About Silvercorp

The sentiment among TipRanks investors is currently positive. Out of the 544,041 portfolios tracked by TipRanks, less than 0.1% hold SVM. In addition, the average portfolio weighting allocated towards SVM among those who do have a position is 3.44%. This means that investors don’t view the company as a core holding.

However, in the last 30 days, 2.6% of those holding the stock increased their positions, and 0.6% of investors did the same over the last seven days. As a result, the stock’s sentiment is above the sector average, as demonstrated in the following image:

Analysts See Strong Upside Potential for SVM

Silvercorp has a Moderate Buy consensus rating based on one Buy and two Holds assigned in the past three months. The average Silvercorp price target of $4.81 implies 109% upside potential.

Final Thoughts: Financial Results Likely to Disappoint

It will be interesting to see how the company’s production increases will translate into earnings. Silvercorp is a consistently profitable company, and analysts expect earnings per share of $0.07.

However, it is worth noting that over the past eight quarters, SVM has missed expectations seven times. Thus, it seems more likely that the same thing will happen this quarter.


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