macquarie research update

Macquarie rates RES as Outperform (1) -
Resource Generation has raised $62.6 million in equity to fund the infrastructure at the Boikarabelo project. Macquarie thinks the successful capital raising as well as Eskom and Transnet's commitment to accessing Waterberg coal are positive developments.

The broker has reduced valuation by 8% to 47c and the target price to 30c from 70c, incorporating the substantially dilutive impact of the equity raising. The Outperform rating is reinstated after a period of research restriction.

Target price is $0.30 Current Price is $0.23 Difference: $0.07
If RES meets the Macquarie target it will return approximately 30% (excluding dividends, fees and charges).

The company's fiscal year ends in June. Macquarie forecasts a full year FY14 dividend of 0.00 cents and EPS of minus 0.10 cents.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 230.00.
Market Sentiment: 1.0