In a report released yesterday, Heiko Ihle from H.C. Wainwright reiterated a Buy rating on Largo Resources, with a price target of $2.90.
TipRanks Cyber Monday Sale
- Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
Heiko Ihle has given his Buy rating due to a combination of factors, including Largo Resources’ operational improvements and cost-cutting measures. The company has shown a significant increase in production, which has led to an 11% year-over-year revenue growth, indicating that management’s efforts are beginning to yield positive results. Additionally, the firm’s recent private placement has strengthened its balance sheet, providing a more stable financial footing.
Moreover, Largo has achieved a notable reduction in cash operating costs, with a 20% quarter-over-quarter decrease, showcasing the effectiveness of its cost optimization initiatives. Despite a decrease in the price target due to dilution from a recent equity raise, the overall valuation of the firm remains strong, supported by a discounted cash flow model for the Maracás Menchen Mine. The anticipated improvements in production costs and the potential of the Storion joint venture in the vanadium flow battery sector further bolster the Buy rating, as these factors are expected to drive future growth and value for the company.
According to TipRanks, Ihle is a top 25 analyst with an average return of 54.3% and a 72.32% success rate. Ihle covers the Basic Materials sector, focusing on stocks such as Avino Silver & Gold, Drdgold, and Endeavour Silver.