On Friday, Deutsche Bank (ETR:DBKGn) updated its financial outlook on Aurubis AG (ETR:NAFG) (NDA:GR) (OTC: AIAGF), a leading copper producer, by increasing the price target to EUR88.00 from the previous EUR84.00, while maintaining a Hold rating on the stock. The revision comes after Aurubis reported its final Q4 figures, which aligned with the earnings pre-release.
The company's final quarter performance highlighted a robust free cash flow (FCF), contributing to a significant reduction in net debt, which was reported at EUR61 million, notably lower than the consensus estimate of EUR245 million. Despite the challenges faced in the smelting markets, Aurubis has kept its operating earnings before taxes (EBT) guidance for fiscal years 2024/25 unchanged at EUR300-400 million. This forecast includes an estimated EUR50 million in start-up losses.
In light of the recent financial disclosures, Deutsche Bank has revised its estimates for Aurubis, reducing its expected earnings before interest, taxes, depreciation, and amortization (EBITDA) by 3-7% for the fiscal years 2024/25 to 2026. However, a decrease in the anticipated capital expenditure (capex) has led to the uplift in the price target from EUR84 to EUR88.
The unchanged operating EBT guidance for Aurubis suggests a buffer against the current economic pressures in the smelting industry. This reassurance, combined with the company's strong free cash flow delivery and better-than-expected net debt position, influenced Deutsche Bank's decision to adjust the price target upwards while keeping the stock rating steady.
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