[ad_1]
RBC Canadian Bank badysts upgraded Limited () to "outperform" in "Sector Perform" after a rights issue provided "critical derisking" on its balance sheet prior to a key phase of growth. power.
A capital injection of US $ 178 million in May meant that the diamond miners' balance sheet "no longer carries high-cost SA debt, improving cash flow by about US $ 6 million per year. year, "adding that" the biggest improvement READ: Petra Diamonds launches $ 178 million rights issue heavily depreciated
RBC badysts said that these developments have allowed Petra to go ahead. Before in its operations in Cullinan. cave mine in South Africa, with improving balance sheet also increasing "the long-term diamond price optionality awarded by investors now that the financial risk has been reduced."
However, the bank also said that it remained for the company, particularly with regard to pressure on diamond prices in global markets due to synthetic alternatives and a growing supply .
RBC said, "This momentum will be important in the coming quarters, but badysts have seen diamond market exposure as compelling in the next 12-24 months due to 39, a strong exposure to the United States, a moderation in supply growth while the other De Beers and Alrosa diamond mines on volumes in 2019, and relative price protection 'if a broader economic environment stagflationist was developing. "
Following the issuance of rights, the bank lowered its target price to 65p from 80p but implied a 20% increase in the new target.
Mid-morning, Wednesday , Petra's shares were down 0.6% to 53.1p.
Source link
