KGC - Lundin First Quantum double upgraded to Buy at BofA on bullish copper view

2023-04-05 15:33:13 ET

Lundin Mining ( OTCPK:LUNMF ) and First Quantum Minerals ( OTCPK:FQVLF ) are double upgraded to Buy from Underperform at Bank of America, which sees copper prices rising strongly from current levels as the fundamental backdrop improves with strong seasonal demand and a strengthening Chinese economy.

BofA's Lawson Winder said he sees "an unfolding operational turnaround" at Lundin ( OTCPK:LUNMF ), and he likes the recently announced Caserones acquisition while expecting clarity on development of the Josemaria project as a catalyst.

The analyst touted First Quantum ( OTCPK:FQVLF ) for its "steadily rising copper production, a copper heavy portfolio, and potential to be the subject of M&A."

At 4x and 6.6x current year EV/EBITDA, respectively, Lundin ( OTCPK:LUNMF ) and First Quantum ( OTCPK:FQVLF ) are trading below their long-term averages at 6x and 8.5x and well below Freeport McMoRan ( FCX ) at greater than 9x.

The BofA commodities team is bullish on gold, predicting $2,200/oz by Q4, but the bank downgrades Kinross Gold ( KGC ) to Underperform from Buy after the stock's 23% YTD gain.

BofA also believes Kinross' ( KGC ) Q1 results could be operationally weak due to the tie-in at the key Tasiast mine and sharply higher cost at its U.S. mines.

Comex gold settled Wednesday at $2,020.90/oz, closing above $2K for the third straight session as it nears its all-time record high of ~$2,070 .

For further details see: