Share Prices & Company Research

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04 Feb 2021 | 16:47

Broker tips: Hummingbird Resources, GlaxoSmithKline

(Sharecast News) - Analysts at Berenberg slashed their target price on Hummingbird Resources from 62.0p to 39.0p on Thursday following the group's fourth-quarter production miss. Hummingbird has released fourth-quarter production of 22,000 from its Yanfolila mine in Mali, taking production for the year to 101,000 and missing consensus estimates of 25,700 ounces and 105,000, respectively.

Gold sold during the quarter was 24.2m ounces at an average received price of $1,862 per ounce but weaker production drove up all-in sustaining costs for the quarter to USD1,496/oz, above our expectation of USD1,162/oz.

The German bank also noted that tonnes processed in the fourth quarter were in line at 359,000 but with a miss on grade at 2.03 grams per tonne, versus 2.5g, caused by grade reconciliation issues.

As a result of the update, Berenberg retained a 'buy' recommendation on the stock despite Hummingbird facing both operational challenges associated with its Yanfolila site and logistical issues in Mali following the coup in August.

"The key upcoming catalysts should be delivering on guidance at Yanfolila and delivering on the permitting and financing package for the new Kouroussa project in Guinea that could double group production," added Berenberg.

Analysts at Deutsche Bank downgraded their recommendation for shares of GlaxoSmithKline to "sell" following the UK drug giant's latest quarterly update.

In a research note sent to clients, they explained that GSK's fourth-quarter financials and outlook had been weaker than their already cautious stance.

Deutsche had previously had the shares at 'hold'. The broker also cut its target price on the stock from 1,400.0p to 1,150.0p.

A further proviso was that valuation was not enough to justify an investment and in any case offered limited support, given how shares in several of GSK's large global peers were also trading on single-digit valuation multiples.

In order to be just "vaguely constructive", one needs to believe that growth was set to rebound in 2022 and that the risk-reward trade-off around the catalyst for the firm's interim research and development pipeline was "attractive".

Deutsche said its confidence was "limited" on both fronts and added that 2022 confidence relied on growth being deferred rather than lost.
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