Hecla Mining Company (HL) Receives a Hold from B.Riley FBR


B.Riley FBR analyst Adam Graf assigned a Hold rating to Hecla Mining Company (HL) today and set a price target of $2.20. The company’s shares closed last Monday at $1.94.

Graf observed:

“While not out of the woods yet, we believe that higher precious metal prices mean higher cash flows and greater ability to repair Hecla Mining’s (HL) balance sheet. Despite this, we have increased our discount rate from 6.75% to 10.1% to simulate the impact of perceived balance sheet distress on shares of HL. Thus, from a valuation standpoint, the negative impact of a higher discount rate offsets the positive impact of higher metal prices. We expect shares to trade with metal prices until HL can remove the risks associated with low cash balance, the draw on the revolver, and the refinancing of the $530M in debt. While HL could be in a much improved financial position 6 to 9 months from now, we remain Neutral on shares of HL at this time. We lower our price target from $2.35 to $2.20.”

According to TipRanks.com, Graf is a 3-star analyst with an average return of 4.1% and a 48.6% success rate. Graf covers the Basic Materials sector, focusing on stocks such as Gold Standard Ventures Corp, Newmont Mining Corporation, and First Majestic Silver.

Currently, the analyst consensus on Hecla Mining Company is a Moderate Sell with an average price target of $2.06.

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Based on Hecla Mining Company’s latest earnings release for the quarter ending June 30, the company reported a quarterly GAAP net loss of $46.53 million. In comparison, last year the company had a net profit of $12.07 million.

Based on the recent corporate insider activity of 30 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of HL in relation to earlier this year.

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Hecla Mining Co. operates as a silver and gold producer. It produces lead, zinc and bulk concentrates for custom smelters and brokers; and develops unrefined precipitate and bullion bars for precious metals traders. It operates through the following business segments: Greens Creek, Lucky Friday, Casa Berardi, Nevada Operations and San Sebastian.

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