{"id":60805,"date":"2012-10-30T11:24:14","date_gmt":"2012-10-30T00:24:14","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2012\/10\/30\/buy-ratings-continue-to-dominate-for-panaust\/"},"modified":"2012-10-30T11:24:14","modified_gmt":"2012-10-30T00:24:14","slug":"buy-ratings-continue-to-dominate-for-panaust","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2012\/10\/30\/buy-ratings-continue-to-dominate-for-panaust\/","title":{"rendered":"Buy Ratings Continue To Dominate For PanAust"},"content":{"rendered":"

\n\t – PanAust<\/span> lifts copper output in September quarter
\n\t – Full year production guidance maintained
\n\t – Company continues to develop additional growth options 
\n\t – Brokers retain a majority of Buy ratings<\/strong><\/p>\n

\n\t
\n\tBy Chris Shaw<\/p>\n

\n\tAn expansion of operations at Phu<\/span> Kham<\/span> helped PanAust<\/span> ((PNA<\/span>)) lift copper output in the September quarter, the company producing 14,933 tonnes<\/span> at a cost of US$1.22 per pound. Production compares to 13,908 tonnes<\/span> produced in the June quarter.<\/p>\n

\n\tFull year production guidance for PanAust<\/span> has been maintained at around 64,000 tonnes<\/span> at costs of US$1.05-$1.15 per pound. Credit Suisse notes with production year to date of just under 45,000 tonnes<\/span>, the December quarter will require an improvement in both grades and throughput for guidance to be achieved.<\/p>\n

\n\tBA Merrill Lynch has maintained the expectation of strong December quarter production for PanAust<\/span>, but takes the view 2013 production is now unlikely to increase by as much as had been previously thought. This reflects a faster than expected decline in grades.<\/p>\n

\n\tTo account for this BA-ML has lowered earnings estimates for PanAust<\/span> by 12% in 2013 to US$200m<\/span>, which the broker notes is well below the consensus result of US$226 million. Others have been less severe, most brokers in the FNArena<\/span> database making only minor changes to earnings forecasts through 2013.<\/p>\n

\n\tA key focus for PanAust<\/span> remains growth projects and as well as the expansion at Phu<\/span> Kham<\/span>, JP Morgan notes PanAust<\/span> still has a number of development options. A maiden resource for Nam San and Long Chieng<\/span> Track is expected in the final quarter of this year, while beyond this year the Phonsavan<\/span> pre-feasibility study is still scheduled for completion in the second quarter of 2013, with feasibility expected in the second half of next year. <\/p>\n

\n\tFor JP Morgan, PanAust<\/span> remains the most attractive copper producer on the ASX<\/span> given the combination of a strong balance sheet and exposure to good medium-term production growth as well as a number of project development options.<\/p>\n

\n\tDespite recent share price strength that leaves the stock trading broadly in line with its valuation, JP Morgan continues to see PanAust<\/span> as attractive relative to the rest of the sector. This underpins the broker's Outperform rating.<\/p>\n

\n\tCiti<\/span> matches JP Morgan's positive rating, noting PanAust's<\/span> growth options should be able to be pursued given a solid funding positions thanks to strong free cash flow generation. PanAust<\/span> is also Citi's<\/span> top copper play on the Australian market.<\/p>\n

\n\tBA-ML is less positive, rating PanAust<\/span> as Neutral. While growth options look solid, valuation is the issue for the broker given PanAust<\/span> is trading at a solid premium to the broker's $2.84 valuation at present.<\/p>\n

\tCredit Suisse is even more conservative, rating PanAust<\/span> as a Sell given the share price is comfortably above the broker's price target for the stock.<\/p>\n

\n\tThis leaves BA-ML and Credit Suisse as the outliers on PanAust<\/span>, as the FNArena<\/span> database shows the six other brokers to cover the company rate the stock as Buy. Price targets range from Credit Suisse at $3.10 to UBS at $4.20, with the consensus target of $3.57 up slightly from $3.54 prior to the quarterly report.<\/p>\n

\n\tShares in PanAust<\/span> today are higher and as at 11.10am the stock was up 4.5c at $3.345. This compares to a range over the past year of $2.19 to $3.84, the current share price implying upside of just under 8% relative to the consensus price target in the FNArena<\/span> database. <\/p>\n

\n\t
\n\tFind out why FNArena<\/span> subscribers like the service so much: "Your Feedback (Thank You)<\/a>" – Warning this story contains unashamedly positive feedback on the service provided.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

PanAust delivered a solid September quarter production report and with a strong balance sheet and growth options in development, Buy ratings continue to dominate.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6],"tags":[23],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/60805"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=60805"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/60805\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=60805"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=60805"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=60805"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}