Copper prices surged back over US$4.00/lb overnight and are up ~6% in March alone. SFR offers strong leverage to rising copper prices, with a 10% rise in copper driving 55-68% increases in our FY26-FY30 earnings for SFR and a 22% lift in valuation. SFR is also benefiting from a recovery in zinc prices which are up 7% this month. Incorporating the stronger spot prices drives a 12% lift in our price target to A$8.20. However, with the stock trading at a modest premium to our price target we reiterate our HOLD rating on SFR. Importantly, stronger base metal prices should enable SFR to accelerate is balance sheet deleveraging. We note that our valuation for SFR at a flat US$4.50/lb copper price into perpetuity rises to A$10.00/share.
To access the full report please log in under the Client Area at the bottom of this page.
Argonaut’s Client Area allows you to view delayed share prices, access Argonaut’s wealth of Research as well as create custom portfolios and set up company watch lists.
If you would like to access our research please contact us to create an account.
