Anglo Pacific Group PLC target price raised by RBC Capital Markets

Anglo Pacific Group PLC’s (LSE:APF, TSX:APY, OTC:AGPIF) share price target has been raised by RBC Capital Markets as its financial guidance has been updated to include the latest earnings royalties.

“We continue to have strong belief in the Anglo Pacific story given strong commodity prices and the benefits of its royalty business model,” the brokerage said, saying the appointment this week of Marc Bishop Lafleche as CEO “removes uncertainty from leadership and gives the company the best chance we believe to continue on the current strategic path.”

Reiterating its “outperform” rating, the target price was pushed from 240p to 245p.

Last week the company reported its highest royalty income everfor the last three months of 2021, as cobalt and coking coal prices hit new highs.

RBC raised its royalty revenue forecast by 2.8% to US$89.6 million, pushing earnings per share (EPS) up 3.4% to US$0.24 per share.

Volume increase at Kestrel in Q1 2022 to account for volume deferral increases full-year 2022 royalty income by 1.5% and EPS by 3.3% to $0.24 per share as well .

“We are also updating our LIORC dividend estimates to include new figures released by our Canadian team,” the analysts said, which increased the net asset value per share from 186p to 188p and led to the new target price.

Analysts said the company’s portfolio exposure to commodities “continues to fit well with long-term themes (particularly once Kestrel exits) and with its pure commodity transfer royalty structure, there are no inflation issues on the cost side, which are rising elsewhere in the industry.”