Ferroglobe PLC Gets a Buy Rating from Oppenheimer

By Ryan Adsit

Oppenheimer analyst Ian Zaffino reiterated a Buy rating on Ferroglobe PLC (NASDAQ: GSM) today and set a price target of $14. The company’s shares closed yesterday at $9.01.

Zaffino wrote:

“In what could be the start of a sustained recovery in the SiM market, we anticipate higher prices to drive stronger than expected 1Q17/FY17 results (report on 5/22). Buoyed by production cuts, higher electricity prices in competing markets, fear of fresh import duties, and demand improvements, spot SiM prices are now ~$1.09/lbs (May 10), vs. ~$1.01/lbs at BoY (January 10), and ~$0.98/lbs at end of December. Recent dumping petitions—filed by GSM—against Australia, Brazil, Kazakhstan, and Norway could provide an additional price tailwind. Meanwhile, domestic ferrosilicon prices have also improved to ~$0.81/lbs from ~$0.79/lbs (May 4), as import prices increase and now approximate replacement costs. Raise 2017E EBITDA to $145M from $135M, owing to favorable pricing; instituting 2018E EBITDA of $275M.”

According to TipRanks.com, Zaffino is a 4-star analyst with an average return of 4.2% and a 58.0% success rate. Zaffino covers the Services sector, focusing on stocks such as Macquarie Infrastructure Company, Bristow Group Inc, and Houghton Mifflin.

Currently, the analyst consensus on Ferroglobe PLC is Strong Buy and the average price target is $13.50, representing a 49.8% upside.

In a report issued on May 11, Jefferies also reiterated a Buy rating on the stock with a $13 price target.

Based on Ferroglobe PLC’s latest earnings report for the quarter ending December 31, the company posted quarterly revenue of $394 million and GAAP net loss of $40.09 million. In comparison, last year the company earned revenue of $423 million and had a GAAP net loss of $25.7 million.

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Ferroglobe PLC provides silicon and specialty metals. It produces silicon metal and silicon and manganese based alloy, serving key customers in the specialty chemical, aluminum, solar, steel and ductile iron foundry industries. The company was founded on February 5, 2015 and is headquartered in London, the United Kingdom.