On Monday, Berenberg increased its price target on Imerys SA (NK:FP) (OTC: IMYSF) shares to €45.00 from €40.00, while reiterating a Buy rating on the stock.
The firm highlighted the value of Imerys' quartz mine in the United States, estimating it to be worth around €12 per share. Berenberg's assessment pointed out that the mine is significantly undervalued.
The company, which specializes in the production and processing of industrial minerals, has shown a stable performance in its construction-related business.
Additionally, Imerys' 50/50 joint venture with Norsk Mineral, operating under The Quartz Corp, has demonstrated resilience and profitability.
According to Berenberg, Imerys' share of earnings from this joint venture reached €55 million, which constitutes 67% of the group's net profit for the first quarter of 2024. This figure is a substantial increase from the €21 million recorded in the first quarter of 2023.
The positive outlook from Berenberg is based on the robust earnings contribution from the joint venture, which underscores the company’s financial health and the successful integration of its strategic partnerships. Imerys' ability to leverage its assets effectively, particularly the quartz mine, contributes to the optimistic valuation.
Investors may find the revised price target and the strong earnings from the joint venture indicative of Imerys' potential for continued growth. The company's strategic focus on high-value minerals and its stable core business are central to its positive financial outlook.
The report by Berenberg suggests confidence in Imerys' market position and its ability to maintain profitability. With the company's share of earnings from The Quartz Corp joint venture reflecting a significant part of its net profit, the increased price target reflects expectations for sustained performance.
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