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Investing.com -- RBC Capital Markets has upgraded Endeavour Mining Corp (TSX:EDV) to Outperform from Sector Perform, raising its price target to 3,000 pence from 2,350 pence.
The brokerage expects a re-rating in miner’s shares, citing a combination of improved operations, rising gold prices, and the potential for substantial shareholder returns.
“With the ramp-ups at Lafigue and Sabodola now complete, Endeavour is entering a free cash flow (FCF) inflection point,” analysts led by Marina Calero said.
They forecast a FCF yield of 17% by 2026, with a projected 3.5% dividend yield in 2025—more than double the peer group average.
Including special dividends and buybacks, total shareholder distributions for 2025 and 2026 could reach $780 million, equivalent to roughly 10% of the company’s market capitalization.
Production is projected to grow by 10% over the next two years, reaching 1.21 million ounces in 2026.
The successful commissioning of the BIOX plant at Sabodala-Massawa and the start-up of Lafigue have helped reduce operational risk and set the stage for margin expansion. RBC now sees adjusted EBITDA rising 14% over the period from fiscal 2025 (FY25) to FY27.
Looking ahead, several catalysts could unlock further value. These include a technical review at Sabodala-Massawa targeting increased throughput and higher-grade ore, as well as a definitive feasibility study (DFS) for the Assafou project expected later this year or in early 2026.
“These initiatives combined could increase 2030 production above 1.6moz, +20% ahead of our forecast (1.3Moz) and +10% vs consensus (1.5Moz),” the analysts noted.
The valuation case is also supported by updated commodity assumptions and increased net asset value (NAV) estimates.
RBC’s price target is based on 1.0x P/NAV and 4.0x EV/EBITDA multiples, in line with intermediate producers but adjusted for geopolitical risks in West Africa.
The firm sees 28% upside to its price target and believes shares could re-rate as higher FCF and shareholder returns materialize.