anyone got thoughts on aby, page-13

How does one get a PE ratio of 5 for ABY?

Last year they produced 58,415 tonnes over four quarters to earn $323,568,000 in revenue at an average price of $5,500 a tonne of copper. (Currently the copper price is $9,200 a tonne, possibly unrealistic long-term).

Last quarter, ABY produced 18,806 tonnes of copper. Average spot price was around $8,600.

If we annualise the revenue based on last quarter, we get $646M. If we use last years expenses of $300M and add a 25% increase to those expenses, we get $271M EBIT or $190M NPAT.

Therefore, super optimistically, with 310M shares on issue, we get earnings of 60 cents a share or a PE ratio of 5.

Below are some "expert" rather than "amateur" forecasts. (lol)

Targets Increased For Aditya Birla
FN Arena News - July 12 2007

By Chris Shaw

As analysts adjust their commodity forecasts higher as has been the case for the past few weeks the process of lifting target prices for various resource stocks is also underway, with copper player Aditya Birla Minerals (ABY) a significant beneficiary.

Both UBS and Credit Suisse have both their metal price estimates and target for the stock over the past week, the former increasing its expected 2007 average price for copper by 8% to US$3.24 per pound and in 2008 by 9% to US$3.00 per pound.

In terms of earnings for the company next year’s higher metal price is offset by a stronger Australian dollar and ongoing input cost pressures, the result being a 2% cut to the broker’s earnings forecast for FY08. The following year some gains should be achieved and the broker has lifted its FY09 forecast by 3%, so the company’s earnings per share outlook now stands at 1c this year, 64c in FY08 and 58c in FY09.

Earlier this week Credit Suisse also adjusted its estimates and the result was more significant for group earnings, the broker’s forecasts increasing in FY08 by 10.9% to 76c and in FY09 by an even more impressive 59.3% to 74.8c. Its estimates compare to the median market forecasts according to Thomson One Analytics of 65c and 58c respectively.

The higher forecasts have flowed through into increases in the respective price targets of the two brokers, UBS’s increasing its 12-month target to $3.85 from $3.30 and Credit Suisse to $3.75 from $3.20. UBS notes at its target price the stock would be trading on a P/E (price to earnings) multiple of 6x in FY08, which would put it at a discount to its peers.