Equinox Gold’s Strategic Moves and Undervaluation Present Attractive Investment Opportunity

Kevin O’Halloran, an analyst from BMO Capital, has initiated a new Buy rating on Equinox Gold (EQX).

Kevin O’Halloran has given his Buy rating due to a combination of factors surrounding Equinox Gold’s recent strategic moves and future potential. The acquisition of Calibre Mining has positioned Equinox as a significant gold producer with a strong production outlook, particularly with the Greenstone and Valentine mines in Canada. This merger is expected to boost production to over 1 million ounces per annum, with projections of 803,000 ounces in 2025 and 1,157,000 ounces in 2026, leading to substantial free cash flow and an improved balance sheet.
Despite the current market focus on the execution of the Greenstone ramp-up and Valentine construction, Equinox shares are trading at a discount compared to senior peers. The company’s shares are valued at 0.78 times net asset value, while senior gold producers average 1.5 times. This undervaluation, combined with the increased production scale and a more achievable operational plan, presents an opportunity for Equinox to re-rate towards its peers. As the company progresses with its flagship projects, there is potential for a re-rating to higher multiples, making it an attractive investment opportunity.

In another report released on June 13, National Bank also maintained a Buy rating on the stock with a C$12.00 price target.

Based on the recent corporate insider activity of 111 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of EQX in relation to earlier this year.