After seven consecutive incremental weekly gains, the spot uranium price fell back to the US$20/lb mark last week.
Jul 25 2017
Macquarie rates BHP as Outperform
Macquarie makes some changes to production forecasts for the US shale assets, but as the changes are largely post FY22 there is only a modest impact on near-term earnings.
US onshore assets remain a key source of negative sentiment for BHP and the broker's forecasts imply a return to cash consumption for the next two years. After factoring recent FX moves, the Australian target price is unchanged at $29. Outperform retained.
UBS rates MGX as Neutral
Mt Gibson is transitioning from drawing on lower grade stockpiles to higher grade Iron Hill ore but the transition has affected lower sales in the June Q, with shipment delays also impacting. Low grade price discounting is continuing to have a significant impact, the broker notes.
Iron Hill and Koolan Island should improve price realisation but meanwhile Mt Gibson continues to sit on a pile of cash with no indication of any return to shareholders. The broker retains Neutral and a 37c target.
Morgans rates RHP as Add
The trading update signals FY17 guidance has been achieved. Morgans suspects the challenges of the first half have been largely overcome as revenue has accelerated and there is no great pressure on gross profit margins.
The broker continues to believe the stock offers a healthy risk/reward proposition, given its relatively low valuation and high growth outlook.
Add rating retained. Target is raised to $0.82 from $0.63.