Barclays sees upside for catalyst-rich Endeavour Mining

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Barclays described Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF, FRA:6E2) as “catalyst-rich” as it started it coverage of the stock with an ‘overweight’ recommendation.


With a GBP23.50 price target Barclays’ investment banking arm sees some 40% upside to the miner’s current price of GBP16.70.


In an initiation note, Barclays highlighted the discount implied by Endeavour’s market value.


“While the stock has held up vs. peers thanks to the buyback and strong Q2 results, it continues to be valued at a 50% PE discount to global gold peers,” Barclays’ analysts said in a note.


The UK bank added that it sees “a busy second half ahead.”


Earlier this month, Endeavour released results that showed production from its gold mines in West Africa up by 18% to 409,000 ounces of gold, while all-in sustaining costs decreased by US$15 per ounce to US$853 per ounce. Total production for the first half of 2021 amounted to 756,000 ounces of gold and an all-in sustaining cost of US$860 per ounce.


That positioned the company well to come in at the top half of its full-year production guidance of between 1.365mln ounces and 1.495mln ounces at costs of between US$850 and US$900 per ounce.


Adjusted net earnings from continuing operations during the second quarter rang int at US$183mln, or US$0.73 per share.


Net debt decreased by US$85mln during the quarter to US$77mln and gross debt decreased by US$120mln.


The interim dividend will total US$70mln, with the record date set at 10 September 2021.

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