Friday, October 10, 2014 1:10:59 AM
Daniel Earle has updated his view on Pan American Silver to HOLD. The company is believe is most-sensitive to the metal price and yet, even after a recent pullback, its share price has significantly outperformed the silver price over the last year.
The target price comes down to $15.00 (from $19.00) on lower multiples reflecting negative free cash flow and muted growth potential at spot silver prices, so he is downgrading our recommendation to HOLD (from BUY)
The impact is slightly negative.
The reduced target multiples are in line with those Daniel Earle used for First Majestic Silver, which he believe is the company’s closest peer. He had used premium multiples previously to reflect what he viewed as an attractive combination of free cash flow in Q2/14, some growth potential, a strong balance sheet, and the highest dividend in our precious metals coverage universe at ~4.1%.
Daniel Earle's analysis suggests that if the silver price does not rebound, the company's balance sheet may begin to be eroded quickly and that its growth prospects may be muted. For example, he expect the company to burn cash before paying its dividend in Q4/14 and 2015 at $18.00/oz silver and he would suggest its Dolores expansion, where a construction decision is expected within 9-12 months, may continue to be delayed.
Recent PAAS News
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 09/12/2024 01:05:32 PM
- Pan American Silver Reports Mineral Reserves and Mineral Resources as at June 30, 2024 • Business Wire • 09/12/2024 01:07:00 AM
- Pan American Silver Reports Unaudited Second Quarter 2024 Results • Business Wire • 08/07/2024 09:02:00 PM
- Pan American Silver to Announce Second Quarter 2024 Unaudited Results • Business Wire • 07/09/2024 09:05:00 PM
- Pan American Silver Provides Mid-Year Exploration Update • Business Wire • 06/17/2024 09:05:00 PM
- Pan American Silver Releases 2023 Sustainability Report • Business Wire • 05/23/2024 09:23:00 PM
- Pan American Silver Announces Results of Annual General and Special Meeting • Business Wire • 05/09/2024 03:14:00 AM
- Pan American Silver Reports First Quarter 2024 Results • Business Wire • 05/08/2024 09:30:00 PM
- Pan American Silver Announces the Sale of La Arena for US$245 Million Cash Upfront and US$50 Million Contingent Payment • Business Wire • 05/01/2024 09:14:00 AM
- Pan American Silver to Announce First Quarter 2024 Unaudited Results and Host Annual General and Special Meeting of Shareholders on May 8 • Business Wire • 04/09/2024 09:05:00 PM
- Pan American Silver reports additional high-grade drill results from the La Colorada Skarn project • Business Wire • 04/08/2024 05:00:00 AM
- Pan American Silver Announces Normal Course Issuer Bid • Business Wire • 03/04/2024 11:55:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/22/2024 02:50:20 AM
- Pan American Silver Reports Audited Financial Results for 2023 and Announces Intention to Make a Normal Course Issuer Bid • Business Wire • 02/22/2024 02:18:00 AM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/06/2024 02:36:35 PM
- Pan American Silver Announces Preliminary 2023 Production Results and Guidance for 2024 • Business Wire • 01/17/2024 11:00:00 AM
- Pan American Announces Preliminary Economic Assessment of the La Colorada Skarn Project • Business Wire • 12/19/2023 12:58:00 AM
- Pan American Silver Provides Annual Exploration Update • Business Wire • 12/05/2023 10:12:00 PM
- Pan American Silver Reports Third Quarter 2023 Results • Business Wire • 11/07/2023 10:05:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 10/12/2023 09:08:59 PM
- Pan American Silver Provides Notice of Third Quarter 2023 Unaudited Results and Conference Call • Business Wire • 10/12/2023 09:02:00 PM
- Pan American Silver Provides an Update on the Restart of Operations at the La Colorada Mine • Business Wire • 10/11/2023 09:20:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 10/06/2023 04:50:55 PM
- Pan American Silver Temporarily Suspends Operations at the La Colorada Mine • Business Wire • 10/06/2023 02:44:00 AM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 09/29/2023 09:13:55 PM
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