A leading broker has put their weight behind the 29Metals Ltd (ASX: 29M) share price to outperform this year.
According to a recent note from Morgan Stanley, shares in the miner are poised to rise.
Let’s take a look at what analysts had to say about the 29Metals share price.
29Metals share price offering ‘compelling value’
Analysts at noted broker Morgan Stanley have lauded the potential latent in the 29Metals share price.
An article published in the Australian Financial Review earlier today elaborated on the note published by the broker.
According to the article, Morgan Stanley expects the 29Metals share price to rise sharply this year. Analysts from the broker noted that they perceive ‘compelling value’ in the share price of the copper miner.
The broker noted that 29Metals was in a tier 1 jurisdiction with plenty of room for diversification. Analysts cited the company’s Capricorn Copper and Golden Grove producing assets.
For 2022, analysts expect 58% of revenue from 29Metals to be generated from copper mining. Zinc (24%), lead (27%) and precious metals (16%) are expected to also contribute to the company’s bottom line.
Analyst cited that the significant diversification in revenue generation has 29Metals poised for further growth.
In the article, an analyst from the broker stated;
“Although we acknowledge that 29Metal’s assets are old and high on cost, there is still significant margin to the current copper price and plans outlined by management indicate significant potential for low capex brownfield production growth if the asset strategy can be delivered, in-turn improving C1 costs from $US1.82 a pound in CY21 to $US0.94 a pound in CY25,”.
Analysts acknowledged that there were risks around mining rates and life-of-mine plans. However, the broker noted that risk-reward was favourable for the 29Metlas share price.
Morgan Stanley initiated coverage on 29Metals with an outperform rating for the company and a share price target of $3.10. At that target price, the company would be worth $1.49 billion.
Snapshot of the 29Metals share price
29Metals is a miner that owns copper projects in Australia and South America. Most of the company’s revenue is generated from its Golden Grove mine in Western Australia.
The 29Metals share price listed on the ASX at the start of July at $2 per share, 55% ahead of its listing price.
Shares in the miner recently received a boost after releasing its quarterly report.
At the time of writing, the 29Metals share price is trading near its record high of $2.42.
The post Leading broker tips strong year ahead for 29Metals (ASX:29M) share price appeared first on The Motley Fool Australia.
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More reading
- What’s up with the 29Metals (ASX:29M) share price today?
- Why the 29Metals (ASX: 29M) share price has surged 12% since its IPO
Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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