Analysts at Berenberg raised their target price on NatWest from 250.0p to 300.0p on Tuesday, stating the firm would likely be the “greatest near-term beneficiary” of rising UK interest rates among domestic banks.
Berenberg said recent UK interest rate expectations had led it to increase net interest income expectations for NatWest, despite its previous NII expectations already being 5% above consensus at the time.
The German bank stated its NII expectations were now roughly 4% above consensus.
“NatWest offers more than just interest-rate gearing,” said Berenberg, which reiterated its ‘buy’ rating on the stock.
“In particular, we believe that the bank will achieve attractive and disciplined mortgage growth alongside cost reductions and an annual capital return of 11%.”
The analysts added that with the stock trading on 0.9x tangible book value for a full-year 2023 return on tangible equity of 11.5%, they think that NatWest remains undervalued.
Analysts at Canaccord Genuity took a fresh look at gold ore mining company Hummingbird Resources on Tuesday following an update on the feasibility study being undertaken at its jointly-owned Dugbe asset.
Canaccord said the study was being delivered by Pasofino Gold as part of its 51% earn-in agreement, and was scheduled for completion in April 2022, with Pasofino confirming in its own release that the study was now roughly 70% complete.
Pasofino’s completion of the study places it on track to complete the earn-in of its 49% interest in the project as under the terms of the agreement, it holds a put option allowing it to acquire Hummingbird’s 51% interest in the project in exchange for a 51% shareholding in Pasofino – something Hummingbird expects Pasofino to exercise.
“As a reminder, the project holds M&I resources of about 57.0Mt at 1.58 grams per tonne (1.0g/t cut-off), and while further resources exist in the inferred category and at lower cut-off grades, Pasofino intends to prioritise this higher-grade component of the resource. The company’s updated PEA from June 2021 outlined a 14-year operation with average steady-state production of about 188,000 ounces and a net present value estimate of $627.0m ($1,600 per ounce gold price),” said Canaccord, which reiterated its ‘hold’ rating on the stock.
“This represents more than 50.0p in net present value per share (net to Hummingbird) on an unfunded basis. While the tight cash position of Hummingbird and ongoing development of Kouroussa is likely to make it difficult to fund Dugbe (in our view), we believe that a sale of the resulting interest in Pasofino could provide a material cash injection in the future.”
