Morgans believes the selloff in Newcrest Mining’s shares in reaction to a 3Q production report that came in -7% below consensus was overdone. Longer than expected maintenance at Cadia is considered a one-off, and heavy rainfall impacted Lihir production.
The broker expects gold production and headline costs at Cadia to normalise in the 2H of 2022 and maintains its Add rating while easing its target price to $26.05 from $27.18.
Management has maintained group guidance for FY22.
Sector: Materials.
Target price is $26.05.Current Price is $21.50. Difference: $4.55 – (brackets indicate current price is over target). If NCM meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
