Analysts published research notes Monday covering a range of basic-materials companies, offering assessments of growth prospects, project economics, and deal dynamics.
Jefferies analysts Marcus Dunford-Castro and Helena Xu said in a research note that Symrise is expected to see top-line momentum building through the year. The German chemicals company is expected to benefit from easing competition and improving trends in its pet food division, the analysts said. Jefferies increased its organic growth expectation for the second quarter to 3.1%, half a percentage point above Visible Alpha consensus. However, the analysts said margins are expected to see near-term modest pressure. Jefferies raised its price target on the stock to 80 euros from 72 euros. Symrise shares closed Friday at 85.64 euros.
Citi analyst Jack Whelan said PLS Group’s spending on long-lead procurement for the proposed P2000 expansion project “is a credible signal that PLS sees high probability” of board approval later this year. “The company would not be ordering mills, crushers, ore sorters, and flotation cells if FID [final investment decision] were genuinely conditional,” Whelan said. Citi expects total capital expenditure for the P2000 project at around 1.8 billion Australian dollars, with first ore in mid-2029. At current spodumene concentrate prices, project economics are attractive, Whelan said. Citi has a neutral rating and A$5.25 per share target on PLS. Shares were down 4.3% at A$5.63.
Citi said Regis Resources’ McPhillamys deposit “is back in play” as a credible growth project with robust economics and a clearer development pathway. Regis reinstated its ore reserve at McPhillamys after developing an alternative tailings plan for the proposed development. “The market had largely treated McPhillamys as an unvalued real option following the 2024 Section 10 impairment and management’s own prior guidance of a 5+ year timeline to identify an alternative solution,” Citi said. Reestablishing the project materially upgrades the growth pipeline of Regis, which is expected to merge with Vault Minerals later this year, the bank said. Citi has a neutral rating and A$8.10 per share target on Regis. The stock was up 1.7% at A$7.06.
RBC Capital Markets said SGH has less to gain in so-called synergies than its partner Steel Dynamics from a proposed acquisition of BlueScope Steel, making valuation critical for SGH. The comments came after the Australian conglomerate announced an up-to A$500 million share buyback. “SGH has today demonstrated ‘discipline’ (a word mentioned 106 times in its recent investor day presentation),” RBC said. “And perhaps implicit in the buy-back announcement is that in SGH’s view, SGH stock shows greater value than BSL.” RBC noted that SGH said the buyback won’t stop it from making investments or pursuing deals. Still, RBC said Steel Dynamics will need to contribute further to get a deal on BlueScope. The broker rates SGH at outperform with a A$47.00 target. Shares were up 3.7% at A$44.85.
Shaw & Partners initiated coverage of BCI Minerals with a buy rating, saying the company will soon become Australia’s largest solar salt operation and the third-largest globally. BCI owns the Mardie Salt and Potash Project in Western Australia, which is currently 81% built. Analyst Peter Kormendy said BCI has A$522 million in available liquidity, versus A$333 million in remaining capital expenditure. “The hardest milestones are now behind BCI,” Shaw said. The firm said it believes the market undervalues the completed asset. “With a market cap below the replacement cost of already-built infrastructure, BCI shares are too cheap for a project with a 60-year mine life, binding customer agreements covering 62% of initial output, and infrastructure-scale cash flows approaching,” Shaw said. Shaw set a A$0.75 per share price target. BCI ended last week at A$0.35.