Gain to target $7.40The company has announced a $282m placement to Toyota Tsusho at $7.50 a share and a fully underwritten 1-for-20 entitlement offer at $6.55 a share to raise $79m. Funds will be used to scale up Olaroz. Deutsche Bank considers the stock fairly valued and maintains a Hold rating. Target is raised to $7.40 from $6.80. Target price : $7.40
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Morgan Stanley - 18/01/2018
Underweight
Target: $5.10
Gain to target $5.10Morgan Stanley is favourably disposed to the company's equity raising of $361m, which includes a $282m placement with Toyota Tsusho. However, the broker suspects stage 2 marketing rights, a lucrative revenue stream, were key to the deal. The broker believes the equity is trading above fair value, even after incorporating growth projects and retains an Underweight rating, an Attractive industry view and raises the target to $5.10 from $4.50.
Target price : $5.10
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Macquarie - 18/01/2018
Upgrade to Neutral from Underperform
Target: $7.35
Gain to target $7.35Although the company has solved funding problems for stage 2 and the hydroxide plant, with its placement to Toyota Tsusho along with an entitlement offer, Macquarie points out this comes with two large caveats. The first is that management broke a promise in 2017 that it would not raise capital. The second is the implied acknowledgement that stage 2 was underestimated. Still, the broker notes the placement at a premium highlights a belief that lithium prices will be higher for longer. Rating is upgraded to Neutral from Underperform. Target is raised to $7.35 from $6.50. Target price : $7.35
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UBS - 17/01/2018
Buy
Target: $8.10
Gain to target $8.10December quarter lithium carbonate production was ahead of UBS estimates. Production guidance for FY18 remains at 14,000t, which allows for a drop in production in the March quarter because of the wet season. Toyota's intention to seek upstream investment reflects further OEM concerns regarding raw material, in the broker's view. UBS maintains a Buy rating and raises the target to $8.10 from $7.00. Target price : $8.10
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Citi - 17/01/2018
Downgrade to Neutral from Buy
Target: $7.70
Gain to target $7.70The share price appreciation has caused Citi to downgrade its rating to Neutral from Buy. The target is raised to $7.70 from $5.50. The company is raising $361m through a $282m strategic placement to Toyota Tsusho and $79m from a one-for-20 accelerated renounceable entitlement offer. Toyota Tsusho will be a 15% shareholder, entitled to nominate one director and appointed as a sales representative for stage 2. Funds will be applied to an expansion of Olaroz. Target price : $7.70
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Morgans - 17/01/2018
Upgrade to Add from Hold
Target: $8.17
Gain to target $8.17The company will place stock with Toyota Tsusho at $7.50 a share along with a rights issue at $6.55 a share to existing shareholders to raise $361m. This will fund the company's portion of the expansion of Olaroz. Despite recent share price strength Morgans upgrades to Add from Hold. Target is lifted to $8.17 from $6.84. Target price : $8.17
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Deutsche Bank - 16/01/2018
Target: $6.80
Gain to target $6.80Target price : $6.80
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Macquarie - 08/01/2018
Downgrade to Underperform from Neutral
Target: $6.50
Loss to target $-0.64FX changes have had a positive impact on FY18 earnings for battery materials producers, but drive modest downgrades to Macquarie's FY19 and FY20 estimates. Rating is downgraded to Underperform from Neutral due to a lack of share price upside. Target is raised to $6.50 from $4.97. Target price : $6.50 Price : $7.14 (08/01/2018) Loss to target $-0.64 -8.96% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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Morgans - 20/12/2017
Upgrade to Add from Hold
Target: $6.84
Loss to target $-0.11The company has guided for a price for lithium carbonate above US$11,000/t for the December quarter and now anticipates a price for the June half 2018 that is around 25% above the December half. Morgans revises its 2018 projection to US$13,750/t and retains that price for three years, suspecting supply will not come on as quickly as previously anticipated. The broker upgrades to Add from Hold. Target is raised to $6.84 from $5.85. Target price : $6.84 Price : $6.95 (20/12/2017) Loss to target $-0.11 -1.58% (excluding dividends, fees and charges - negative figures indicate an expected loss).
[/table]
ORE Price at posting:
$7.17 Sentiment: Hold Disclosure: Held
