buy from deutsche bank

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Deutsche Bank rates SBM as Bu 14/07/2009 05:16PM
SBM - St Barbara Ltd
The company's strategic review has highlighted more short term issues than the broker expected. So while Deutsche still sees upside in the company, it is also taking another look at its assumptions.

This sees the broker come up with a new guidance for FY10-12, which has less production, higher per ounce costs, and more capex than previously modelled.

All that said, the broker buys into FY10 being a consolidation year, and thinks the increased capex will eventually lay the foundations for the future. Buy and target maintained.

Target price is $0.50 Current Price is $0.18 Difference:$0.32 - (brackets indicate current price is over target). If SBM meets the Deutsche Bank target it will return approximately 178% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Deutsche Bank forecasts a full year FY09 dividend of 0.00 cents and EPS of 0.00 cents.

Market Sentiment: 1.0