First Majestic Silver Corp (FR)

[SsMurry]

Negative rating for FR
Analyst Daniel Earle has released his views on First Majestic. First Majestic reported adj. Q3/14 EPS of -$0.04/share, below consensus of $0.04 and Daniel Earle's estimate of $0.05 with the miss due to higher costs and slightly lower realized prices

Production was pre-released October 14, with production of 2.68 Moz Ag (3.52 Moz AgEq); Total cash costs were reported this morning at $10.41/oz (AISC of $19.89/oz), significantly higher than Daniel Earle's forecast of $8.60/oz due to higher unit costs at all mines

As previously announced, the company suspended silver sales during the quarter; subsequently, it sold all 934 koz of inventory at an average price of $17.29/oz (the Q3/14 spot price averaged roughly $19.71/oz for reference)

The company's current total cash cost guidance range of $8.67-$9.12/oz would require major cost improvement in Q4 to be achieved, in Daniel Earle's view

Daniel Earle has lowered his 12-month target price to C$7.50 from C$10.00, reflecting lower multiples across the sector and the challenging silver price for the company and maintains his HOLD recommendation.