Noble cuts estimates for Great Panther Mining following recent second quarter numbers, but retains Outperform rating and $1.50 target price

Noble Capital Markets has reduced earnings estimates for Great Panther Mining Corp (TSE:GPR) (NYSEAmerican:GPL) following the junior miner’s recent second quarter numbers, but it retains an Outperform rating and $1.50 target price on the stock.

In a note to clients, Noble’s analysts pointed out that Great Panther reported a second quarter loss of $5.6 million, compared with their forecast for earnings of $357,000, with the variance due to higher costs in the quarter.

The analysts said they had lowered their 2019 underlying earnings (EBITDA) estimate for Great Panther to $36.3 million, down from $39.3 million previously, and had also cut their 2020 EBITDA estimate to $88.7 million from $90.8 million.

They pointed out that the revised 2020 estimate reflects a modestly slower ramp up in margin improvement and increased shares outstanding.

The Noble analysts said: “While the first two quarters were impacted by higher costs than anticipated, we believe the company is on the right track toward showing improved financial results beginning in the second half. 

“While the Tucano mine has taken center stage, increased contributions from Guanajuato, contingent on successful exploration efforts, increased plant capacity at Topia in 2020 and bringing Coricancha into production all support the long-term growth outlook.”

They concluded: “Assuming our price target is achieved, we believe GPL shares offer attractive capital appreciation potential based on the current price.”

Roth keeps Buy, cuts target

Meanwhile, analysts at Roth Capital Partners also noted that higher costs caused Great Panther’s second quarter results to come in slightly below their expectations.

But they also said: “Despite the weaker than expected quarter, we believe Great Panther remains on track for a stronger 2H19 as the rainy season comes to an end and optimizaton efforts take hold at Tucano.”

The Roth analysts’ reiterated a Buy rating on Great Panther while lowering their price target to $2.00 per share from $2.25 previously.

In Toronto on Monday, Great Panther shares were 3.5% lower at $1.10.

Story by ProactiveInvestors