BMO cuts Endeavor Silver price target to $5.25

Endeavor Silver Corp. (TSX:EDR) released its financial results for the first quarter last week. The company reported revenue of $57.7 million this quarter, up 67% year over year. Though the company’s net earnings were flat year over year as inflation ate away at gross earnings. The company posted net income of $11.7 million for the quarter.

Commenting on the results, CEO Dan Dickson said, “Our performance in the first quarter was strong and puts us on track to meet our 2022 production guidance.”

Endeavor announced that its mine operating income for the quarter increased 258% year-on-year to $20.3 million, while its pre-tax mine operating cash flow increased 101% year-on-year to $26.7 million.

In terms of production results, the Company produced 1,314,955 ounces of silver and 8,695 ounces of gold, a 25% increase in silver production while gold production decreased 22% year-on-year. This brings the Company’s total production to 2,010,555 silver equivalent ounces, a 4% increase over the prior year. In addition, the company processed 206,147 tonnes year-on-year.

Endeavor says cash costs per ounce of silver production were $10.21, up 30% year-over-year, while total costs per ounce of silver for the quarter were $15.13. The Company sold 1,717,768 ounces of silver at a realized price of $24.38, down approximately 10% from the prior year. They also sold 8,381 ounces of gold at a realized price of $1,970, up 16% year-on-year.

Endeavor Silver currently has 7 analysts covering the stock with a 12-month average price target of $7.12, a 65% increase from the current share price. Of the 7 analysts, 2 have buy ratings and the other 5 have hold ratings. The street high is $11.04, or up 155%.

In BMO Capital Markets’ note on the results, they reiterate their assessment of the market‘s performance and lower their 12-month price target to $5.25 from $6.00, saying the change is primarily due to the rolling -Due to forward estimates.

On the results, BMO says Endeavor Silver’s reported adjusted earnings per share of $0.07 beat its estimate of $0.04. The other highlight BMO talks about is the company’s operating cash flow, which matched estimates of $21.7 million.

While BMO notes that Endeavor’s sales were $57.5 million, which includes a good chunk of inventory, they say the additional metal sales were previously cabled.

Below are BMO’s updated estimates of Endeavor Silver.

Information for this briefing was found through Sedar and Refinitiv. The author has no securities or affiliations with the organizations discussed. No buy or sell recommendation. Always conduct additional research and consult a professional before purchasing any security. The author does not own any licenses.

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