investec lowers their price expectations

Investec have lowered their price goal on BRM from $6.28 to $5.52 now that Wah Nam are at the table, even though they expect a rail deal in 8 weeks. Apparently only those with "significant risk tolerance" need buy the shares.

The "imminent" rail deal can't be too flash if we can only expect the SP to rise to $5.52!

http://www.brockman.com.au/images/stories/pdf/brocker_reports/BRM_Investic3Q/'11_20110727.pdf

"..Corporate ructions delayed a rail access deal but with Wah Nam now firmly in control, the priority has again focused on a services agreement with Fortescue (FMG). We believe an agreement is likely within the next 8 weeks, paving the way for a debt financing and capital raising."


"... As a consequence of the impact of the weaker share price on the assumed 30% capital raising at a 10% discount to market, our share price target has declined from A$6.28/share to A$5.52/share."

"...We highlight this is a speculative risk stock, suitable only for investors with significant risk tolerance. Our target price is in line with our unrisked, financed, NPV."

They were a lot more bullish back in May when $8 parties were on the drawing board.

"Should BRM achieve its targets, our un-risked NPV increases to A$7.71/share, assuming 30% of the capital cost is equity financed at a 10% discount to market"