H.C. Wainwright analyst Heiko Ihle reiterated a Buy rating on Sierra Metals Inc (SMTS) today and set a price target of $4.25. The company’s shares closed yesterday at $1.21, close to its 52-week low of $1.15.
Ihle said:
“We reiterate our Buy recommendation and our price target of $4.25 per share. Our valuation remains based on an equally weighted composite of net asset value (NAV) and cash flow per share (CFPS). We apply a 12x multiple to our 2019E CFPS. We further use a 9.0% discount rate on Yauricocha and Bolivar. Due to the slightly higher risk factors at Cusi, we use a 10.0% discount rate for the asset. While we have increased our throughput forecast at 320,000 tonnes, our price target remained unchanged given the relatively small contribution the mine has to overall revenues.”
According to TipRanks.com, Ihle is a 3-star analyst with an average return of 0.8% and a 46.9% success rate. Ihle covers the Basic Materials sector, focusing on stocks such as Solitario Exploration & Royalty, Americas Silver Corporation, and Golden Star Resources Ltd.
Currently, the analyst consensus on Sierra Metals Inc is a Moderate Buy with an average price target of $4.
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Sierra Metals Inc’s market cap is currently $198.5M and has a P/E ratio of 22.00. The company has a Price to Book ratio of 1.15.
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Sierra Metals, Inc. engages in the production, exploration, and development of precious and base metals. It operates through the Peru and Mexico geographical segments. The Peru segment consists of Yauricocha Mine. The Mexico segment conssits of Bolivar and Cusi Mines. The company was founded on April 11, 1996 and is headquartered in Toronto, Canada.
