HK-listed gold stocks jump as US economic fears boost bullion prices
On Monday, Berenberg updated its price target on Boliden AB (ST:BOL:SS) (OTC: BDNNF) shares, raising it to SEK340.00 from SEK320.00, while keeping a Hold rating on the stock. The adjustment follows Boliden’s Q4 and FY 2024 financial results, released on February 6, which slightly exceeded Berenberg’s forecasts. The company’s shares surged approximately 13% on the day of the announcement, a reaction attributed to Boliden’s decision to cancel its dividend to conserve cash and reduce the planned equity raise necessary for its acquisition of mines from Lundin Mining (OTC:LUNMF).
Berenberg’s analyst highlighted that despite the cancellation of the dividend, Boliden’s management has confirmed that its dividend policy remains unchanged and anticipates resuming dividend payments with the 2025 results. The firm’s net debt stood at SEK10.7 billion at year-end, surpassing Berenberg’s estimate of SEK15.9 billion. This was due in part to a significant working capital inflow of SEK3.7 billion, as opposed to the expected SEK0.3 billion, and a deferral of SEK0.5 billion in capital expenditures from Q4 to 2025.
The analyst’s commentary suggests a continued cautious stance on Boliden’s stock. While acknowledging the company’s stronger-than-expected financial performance at the close of the year, Berenberg points out that operational performance has been inconsistent, and maintaining stability is crucial. The firm also notes that low treatment and refining charges (TC/RCs) are expected to persist as a near-term issue, coupled with a subdued outlook for base metals, which leads the analysts to seek value in other investments.
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