BMO Capital analyst Alexander Pearce maintained a Buy rating on Champion Iron (CIA – Research Report) yesterday and set a price target of C$5.50.
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Alexander Pearce has given his Buy rating due to a combination of factors including Champion Iron’s strong financial performance and attractive valuation metrics. The company reported a 6% EBITDA beat for the fourth quarter of fiscal year 2025, driven by slightly better revenue and cost management. Despite a slight miss in earnings due to higher depreciation and taxes, the overall financial health remains robust with a free cash flow yield of 9% and a net debt position of C$590M.
Pearce also highlights the company’s promising shipment momentum, with a projected 21% increase in sales year-over-year for fiscal year 2026. This growth is supported by the drawdown of iron ore stockpiles at Bloom Lake, which is expected to enhance cash flow and cost efficiency. Champion Iron’s stock trades at attractive EV/EBITDA multiples, making it a compelling investment opportunity. Additionally, the company’s high-grade and low-carbon product offerings, along with potential margin improvements from the upcoming DRPF circuit, further bolster the positive outlook.
Pearce covers the Basic Materials sector, focusing on stocks such as Champion Iron, Labrador Iron Ore, and Atalaya Mining. According to TipRanks, Pearce has an average return of 10.3% and a 53.73% success rate on recommended stocks.
In another report released yesterday, Citi also maintained a Buy rating on the stock with a A$7.30 price target.