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Tuesday, April 15, 2025 – BMO Capital Markets has initiated coverage on First Quantum Minerals Ltd . (TSX:FM:CN) (OTC: FQVLF), a mining company with a market capitalization of $9.8 billion and trailing twelve-month EBITDA of $1.6 billion, with an Outperform rating, setting a price target of Cdn$23.00. Analyst Matthew Murphy at BMO Capital expressed optimism about the mining company’s prospects, particularly focusing on its Cobre Panama (CP) project.
Murphy highlighted the potential for CP’s return to production, estimating a 70% likelihood by 2027, which is more optimistic than the market’s current expectations. According to InvestingPro data, the stock currently trades below its Fair Value, suggesting potential upside despite its high P/E multiple. He noted that while risks remain high regarding CP, the possible outcomes for First Quantum Minerals (OTC:FQVLF) are favorably biased toward positive developments.
The analyst pointed out that First Quantum Minerals is actively working on expanding its operations in Zambia and is exploring strategies to mitigate balance sheet risks. With a current ratio of 2.08 and liquid assets exceeding short-term obligations, the company maintains a solid financial foundation. Murphy’s outlook suggests that the company’s efforts to overcome challenges in Panama and pursue growth in South America could lead to substantial long-term benefits.
First Quantum Minerals is in the process of navigating discussions around CP, and BMO Capital anticipates that there will be some volatility as these talks progress. However, the firm’s stance indicates a belief that the company’s stock has a significant upside potential.
The Outperform rating and the Cdn$23.00 price target set by BMO Capital Markets reflect a positive view on First Quantum Minerals’ ability to address its current challenges and capitalize on growth opportunities in the future. Murphy’s comments underscore the firm’s confidence in the company’s strategic initiatives and its potential for success.
In other recent news, First Quantum Minerals has faced a downgrade from Canaccord Genuity, which shifted its rating from "Buy" to "Hold." This adjustment follows the company’s revised copper production guidance, which fell short of Canaccord’s projections for the next three years. Despite higher-than-expected gold production at Kansanshi and Guelb Moghrein, the company’s overall capital expenditure guidance has risen by 26% compared to Canaccord’s estimates. The increased capex, along with lower copper production and stable C1 cost guidance, has raised concerns about potential financial pressures. Canaccord analysts highlighted a possible funding gap of approximately $500 million, which exceeds the company’s current credit facility. This funding shortfall may necessitate First Quantum Minerals to seek additional financial resources. The downgrade and reduced price target to Cdn$20.00 reflect these financial and operational challenges.
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