brokers recommendation sp targets

24/07/2013

Citi rates MBN as Buy (1) -

June quarter production came in a bit shy of the broker’s forecasts on the back of lower quality ore, ongoing crusher work and a shortage of explosive. Costs also came in steeper than the previous quarter, although they were still below Citi’s estimates. In the meantime, nickel prices remain at multi-year lows.

The positive in this is that if prices do turn, Citi notes MBN offers strong leverage to the upside. The broker continues to see valuation support based on a premise of stronger nickel prices in the medium term, but a cautious approach is taken given Citi has some concerns about the operational outlook and the long-term viability of the asset. Neutral call and 30c price target maintained.

Target price is $0.30 Current Price is $0.08 Difference: $0.218

If MBN meets the Citi target it will return approximately 266% (excluding dividends, fees and charges).

The company's fiscal year ends in December. Citi forecasts a full year FY13 dividend of 0.00 cents and EPS of minus 8.82 cents.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 0.93.

Market Sentiment: 0.3



Macquarie rates MBN as Neutral (3) -

Target $0.60 (was $0.65). June quarter production missed Macquarie by 17%, with poor ore quality impacting on both grades and recoveries. Cash costs did come in a little better than hoped at least.

The result sees some cuts to forecasts, but the Neutral call is otherwise maintained, the broker believing current work to lower mining costs and to improve plant throughput and recoveries should start bearing fruit in the second half of the year, which in turn should see the company cash flow positive again in FY14. In the meantime, leverage to a rising nickel price is significant.

Target price is $0.60 Current Price is $0.08 Difference: $0.518

If MBN meets the Macquarie target it will return approximately 632% (excluding dividends, fees and charges).

The company's fiscal year ends in December. Macquarie forecasts a full year FY13 dividend of 0.00 cents and EPS of minus 9.20 cents.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 0.89.

Market Sentiment: 0.3