UPDATE: CIBC Starts Gatos Silver (GATO) at Outperformer
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CIBC analyst Alex Hunchak initiates coverage on Gatos Silver (NYSE: GATO) with a Outperformer rating and a price target of $14.00.
The analyst comments "We initiate coverage of Gatos Silver with an Outperformer rating and a $14.00 price target. Gatos is a true primary silver producer, with its recently commercial Cerro Los Gatos (CLG) mine in Chihuahua, Mexico expected to produce nearly 8Moz of silver and nearly 11Moz of silver-equivalent in 2021. With top-of-class leverage to the silver price, a NYSE listing, and significant longer-term exploration potential, we see Gatos Silver as a compelling avenue for exposure to the green energy tailwinds expected for the silver commodity in the coming years. At spot prices, Gatos currently trades at a P/NAV of 1.2x and a P/2021E CFPS of 11.5x compared to the peer group averages of 1.5x and 11.7x, respectively. We see exploration results, delivery of strong operating results against guidance, and an update on CLG’s potential expansion to 3,000tpd (from 2,500tpd currently) as key potential catalysts to support the stock over the next 12 to 18 months."
Shares of Gatos Silver closed at $9.70 yesterday.
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