FBR Capital Raises Price Target on Hecla Mining (HL) Following Strong 2Q
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FBR Capital reiterated a Market Perform rating on Hecla Mining (NYSE: HL), and raised the price target to $6.00 (from $5.00), following the company's 2Q earnings report. Hecla reported a 2Q beat with adjusted EBITDA of $77.8M, versus consensus of $60M, and adjusted EPS of $0.07, versus the Street at $0.05.
Analyst Lucas Pipes commented, "On August 4, Hecla reported a 2Q beat as costs beat our estimates and the company realized higher-than-anticipated silver prices. Hecla maintained its recently updated 2016 production guidance (July) and announced its reduced guidance for cash cost after by-products. Overall, Hecla emphasized its strategic objectives of increasing productivity over cost cutting into 2017. We believe the company will emphasize production in the current environment and after successful cost cutting thus far. Hecla added that it would consider hedging some but not all zinc sales in the current market environment. Following another quarter of impressive costs at San Sebastian, Hecla announced positive exploration results and an increased exploration budget (by $2.5M) at the mine. The company will also study the potential to take San Sebastian underground. Finally, Hecla announced securing the option to extend the rental agreement for the Velardena mill through 2018– end on the successful conversion of resources to reserves. We were encouraged by the company’s results and commentary on San Sebastian but maintain our Market Perform on valuation with an updated $6 price target."
Shares of Hecla Mining closed at $6.78 yesterday.
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