Barclays Maintains an 'Overweight' on Stillwater Mining (SWC); Still Mining At Stillwater - Field Trip Highlights

December 7, 2011 1:07 PM EST
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Price: $17.00 --0%

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Barclays maintains an 'Overweight' on Stillwater Mining (NYSE: SWC) price target of $20.00.

Barclays analyst says, "We spent the past two days visiting Stillwater Mining's largest asset (the Stillwater Mine), touring the company's recycling facility, and meeting with senior management. Bottom Line: We maintain our view that SWC shares are significantly undervalued within the context of our positive view towards palladium."

"Takeaways from the tour: 1. Operations On Track - SWC's existing operations remain on track to achieve full-year targets, with no change to the forward-looking operating outlook at the Stillwater mine, which accounts for ~75%-80% of SWC's total production. We are lowering our Q4 estimate, strictly on backwards-looking adjustments. Our 2012 estimates are unchanged; 2. Equity Issuance Unlikely - Contrary to popular belief, in our view SWC will not issue equity to fund the development of growth projects (Marathon, Blitz/Graham Creek, Altar). Based on our discussions with management, we believe SWC is more likely to slow the pace of development/capital spending if PGM prices decline, rather than significantly sacrifice the current capital structure to finance the future projects. Furthermore, if some external financing is chosen, we believe the preference would be for debt over equity."

For an analyst ratings summary and ratings history on Stillwater Mining click here. For more ratings news on Stillwater Mining click here.

Shares of Stillwater Mining closed at $11.63 yesterday.

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