On Monday, Scotiabank (TSX:BNS) increased its price target for Altius Minerals Corp (ALS:CN) (OTC: ATUSF) to C$33.00, up from C$27.00, and shifted the stock's rating to Sector Outperform from Sector Perform. The revision reflects an anticipated positive return of over 29% to the new 12-month target price. The stock, currently valued at $838.45 million by market capitalization, is trading near its 52-week high with a beta of 0.9, indicating relatively low price volatility.
The upgrade by Scotiabank is based on several factors including the advancement of the Kami Fe project and the expected sale of the Silicon Au royalty in Nevada. These events are seen as potential significant catalysts for Altius Minerals within the next 12 to 18 months.
Scotiabank's new target is founded on a valuation of 1.7 times the firm's updated net asset value per share (NAVPS) estimate, which also accounts for Altius' investments in ARR-T, LIF-T, LIRC-T, and its junior mining portfolio. The analyst highlighted that the main components of the company's operating level NAVPS estimate now include potash, silicon, iron ore, and renewables, collectively comprising 80% of the estimate.
The report further notes that Altius Minerals' shares are trading at a relatively attractive price-to-net asset value (P/NAV) of 1.11 times. This valuation metric is used to compare a company's market value to its net asset value, with a lower ratio often indicating an undervalued stock. According to InvestingPro analysis, which provides comprehensive valuation metrics and 10+ additional ProTips, the stock currently trades at a P/E ratio of 88.91x and maintains impressive gross profit margins of 89.25%.
The optimism surrounding Altius Minerals is partly due to the diverse nature of its resource portfolio. With significant portions of the company's valuation tied to potash, silicon, iron ore, and renewable resources, the company is positioned to benefit from various sectors within the natural resources market.
The company has demonstrated strong financial stability with a "GOOD" health score on InvestingPro, while maintaining a consistent track record of dividend growth for five consecutive years, currently yielding 1.39%. Discover more detailed insights and access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Altius Minerals has reported decreased Q3 revenue and net earnings. The company's Q3 2024 royalty revenue fell to $16.6 million, down from $17.8 million in Q3 2023. Net earnings also saw a slight decline to $3.2 million, compared to $3.5 million in the same quarter of the previous year. Despite these decreases, Altius Minerals declared a quarterly dividend of $0.09 per share.
The firm's credit facility was amended, extending the term to August 2028 with a total available credit of $225 million. In other developments, Altius Renewable Royalties is undergoing a take-private transaction by Northampton Capital.
The outcome of an ongoing arbitration with AngloGold Ashanti remains significant for Altius Minerals' future strategic decisions. The company is focusing on organic growth from ongoing projects in base and battery metals, while anticipating increased global demand in potash.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.