B2Gold shares target raised with Buy rating on Q2 earnings outlook

Friday - B2Gold Corp. (NYSE:BTG) has received a revised price target from Jefferies, increasing to $4.00 from the previous $3.50, while the firm maintained a Buy rating on the stock. The adjustment reflects expectations for higher quarter-over-quarter earnings, attributed to a stronger gold price environment witnessed in Q2.

The analyst from Jefferies anticipates that B2Gold's cash costs will experience a slight increase across its portfolio but will start to decrease in the latter half of the year. Despite a reduction in Q2 gold ounces from the Masbate mine, this is expected to be compensated by marginally higher outputs from the Fekola and Otjikoto mines, leading to a consistent quarter-over-quarter production level.

The company's production profile is projected to be balanced between the first and second halves of the year, with the firm on track to meet its full-year production and all-in sustaining cost (AISC) guidance.

Additionally, B2Gold is predicted to showcase a significant cash inflow of approximately $100 million on its balance sheet, stemming from the sale of 79 million shares of Calibre Mining Corp. (CXB). This financial boost is likely to be a highlight in the company's upcoming quarterly results.

Further updates are expected regarding the mill, open pit, and underground construction at the Goose project, following the successful completion of the Winter Ice Road campaign in the first quarter.

Moreover, B2Gold has recently published a preliminary economic assessment (PEA) for the Gramalote project and is progressing towards a feasibility study (FS), which is scheduled for completion by mid-2025.

In other recent news, B2Gold Corp. reported its first quarter results for 2024 with production figures aligning with forecasts and lower-than-anticipated cash costs. This resulted in a 19% increase in EBITDA over expectations.

The company also finalized a transaction to divest a collection of 10 precious and base metals royalties to Versamet, gaining a significant stake in the newly named entity.

B2Gold's shares had its price target adjusted by Canaccord Genuity, following the Q1 results, lowering the target to C$7.00 from the previous C$7.50, while still maintaining a Buy rating.

BMO Capital, however, maintained its Outperform rating and C$6.00 price target for B2Gold's shares, expressing confidence in the company's prospects.

The company's Goose project has experienced delays, pushing its expected start of production to the second quarter of 2025. B2Gold is also in discussions with the Mali government about the future of the Fekola complex, with plans to potentially increase production.

InvestingPro Insights

Following the positive outlook from Jefferies, B2Gold Corp. (NYSE:BTG) appears poised for a promising financial period. According to InvestingPro data, B2Gold holds a P/E ratio (adjusted) of 6.34, showcasing a potentially undervalued stock in comparison to industry averages. Furthermore, the company's Price / Book ratio stands at 1.02, indicative of a potentially fair valuation relative to its net assets. In terms of performance, B2Gold has reported a solid gross profit margin of 59.63% over the last twelve months as of Q1 2024, underlining efficient operational management.

InvestingPro Tips highlight that B2Gold not only holds more cash than debt on its balance sheet but also expects net income growth this year. Additionally, the company pays a significant dividend to shareholders, with a current yield of 5.37%, which could appeal to income-focused investors. The company's strong financial health is further underscored by the fact that its liquid assets exceed short-term obligations, and cash flows can sufficiently cover interest payments.

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