5E Advanced Materials (FEAM) PT Lowered to $1.25 at Maxim Group

Maxim Group analyst Tate Sullivan lowered the price target on 5E Advanced Materials (NASDAQ: FEAM) to $1.25 (from $4.00) while maintaining a Buy rating.

The analyst commented: "We increase our cash burn forecasts after FEAM reported F4Q24 (Jun) results earlier this week, including a higher cash burn than we expected. Since FEAM is already producing boric acid in California, we believe FEAM will periodically receive orders for future boric acid production from large industrial customers. Last week's update call provided details on a growing list of potential customers. FEAM is currently pre-revenue, and we maintain our forecast for initial revenue in F3Q25 (Mar). FEAM ended F4Q24 with $4.9M in cash and $68.1M in convertible debt (the unamortized convertible debt balance is $71.7M). Since then, FEAM added $6.0M of convertible debt and issued equity, raising proceeds of ~$4.0M (gross) at $0.75 per share. We forecast that on 9/30/24 FEAM will have $9.9M in cash and $77.5M in convertible debt. After a $5.0M cash burn in F2Q25 (Dec), we anticipate FEAM next raises capital in the first half of CY25. We maintain our Buy rating, but reduce our price target to $1.25, from $4.00. We derive our $1.25 price target by employing a DCF analysis on our lower free cash flow forecasts to calculate a net present value using an 18% discount rate on FEAM's boric acid project in California."

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