On Monday, Hecla Mining Company (NYSE:HL) saw its price target increase to $6.90 from the previous $6.60, with a maintained Buy rating from Roth/MKM. This adjustment comes as a result of updated precious metals price forecasts by the firm. According to the analyst's statement, the revisions reflect actual gold and silver averages for the third quarter of 2024, along with increased projections for the fourth quarter of 2024 and the following years.
The analyst has revised the forecast for the fourth quarter of 2024, raising the expected gold price from $2,200 per ounce to $2,550 and silver from $24.72 per ounce to $30.00. Looking ahead to 2025, the gold price forecast has been increased from $2,100 per ounce to $2,375, while the forecast for silver has been raised from $24.00 per ounce to $27.94.
Further into the future, for the year 2026 and beyond, the firm has also adjusted its outlook. Gold price forecasts have been raised from $2,000 per ounce to $2,300, and silver from $24.00 per ounce to $27.06. These upward adjustments in the precious metals market have led to the increased price target for Hecla Mining.
The Roth/MKM analyst believes that Hecla Mining is well-positioned to have a strong third quarter owing to the elevated prices of metals. The company's stock price target has been raised as a direct response to these updated metal price forecasts, reflecting the analyst's optimism about the company's future performance against the backdrop of a favorable market for gold and silver.
In other recent news, Hecla Mining has been making significant strides with record revenues and high silver production, marking the second-highest in the company's history. This comes after the company's strategic focus on generating free cash flow, investing in operations, and reducing debt. B.Riley has increased the price target for Hecla Mining shares to $7, maintaining a Buy rating on the stock, following an assessment of the company's strong second-quarter performance.
The company's key mining operations, including the Greens Creek and Lucky Friday mines, have shown strong performance, with the latter expected to produce 5 million ounces of silver annually. The Casa Berardi mine has increased its production guidance, while the Keno Hill mine surpassed its full-year 2023 production in just the second quarter of 2024.
Hecla Mining is also in the process of finding a new CEO, emphasizing the maximization of the value of North American assets.
B.Riley's analysts predict a positive outlook for Hecla Mining, expecting the company to reach the upper range of its 2024 guidance due to higher production volumes from its Keno Hill and Casa Berardi operations. The firm has revised its projections for Hecla's third-quarter and full-year 2024 adjusted EBITDA, increasing estimates from $70.2 million to $96.4 million for the third quarter, and from $271.4 million to $359.6 million for the full year.
The company anticipates cost improvements in the second half of the year, coinciding with the start of production at the Flame & Moth deposit. However, Hecla Mining acknowledges the need to maintain current levels of cost investment at Keno Hill to ensure long-term value and suspension costs related to Nevada and Mexico will continue.
InvestingPro Insights
Hecla Mining's recent price target increase aligns with several positive indicators from InvestingPro. The company's stock has shown strong performance, with a remarkable 75.68% price total return over the past year. This robust growth is further supported by an InvestingPro Tip suggesting that Hecla Mining has maintained dividend payments for 14 consecutive years, demonstrating financial stability despite market fluctuations.
The analyst's optimistic outlook on precious metal prices is reflected in Hecla's financials. According to InvestingPro Data, the company's revenue grew by 37.91% in the most recent quarter, indicating a positive trajectory that could be amplified by the projected increase in gold and silver prices. Additionally, the EBITDA growth of 33% over the last twelve months suggests improving operational efficiency.
Another InvestingPro Tip notes that analysts predict the company will be profitable this year, which could be a turning point for Hecla given its current negative earnings per share. This potential profitability, combined with the favorable precious metals market outlook, may justify the higher price target set by Roth/MKM.
For investors seeking a deeper understanding of Hecla Mining's prospects, InvestingPro offers 11 additional tips, providing a comprehensive analysis to inform investment decisions in this dynamic precious metals market.
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