Endeavour Mining is reaching a free-cash-flow inflection point - broker

RBC Capital Markets sees astir 40% full instrumentality successful Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF, FRA:6E2) shares as the West African golden shaper has reached a free-cash-flow inflection constituent successful the existent golden terms environment.

The broker reiterated an Outperform standing and 6,000p terms people connected the London- and Toronto-listed miner, compared with a anterior adjacent of 4,631p. Its upside script rises to 7,500p, based connected a 20% higher golden terms script versus spot, portion its downside lawsuit sits astatine 3,900p.

Endeavour reports first-quarter results connected 30 April, with RBC’s estimates moving up of consensus. The broker forecasts Q1 golden accumulation of 275,000 ounces, 3% supra Visible Alpha consensus, with all-in sustaining costs of US$1,959 per ounce, 2% beneath consensus. That feeds into an EBITDA estimation of US$837 million, 4% supra consensus, portion nett net are forecast astatine US$399 million, 20% ahead, helped by little taxes. RBC besides expects escaped currency travel of US$613 million, 8% supra consensus.

“We deliberation EDV has entered an FCF inflexion point, supported by the existent precocious golden terms environment,” analysts said.

RBC estimates the existent golden rally could treble Endeavour’s 2026 free-cash-flow output to 11%, leaving the institution good placed to money aboriginal maturation astatine Assafou portion maintaining what the broker describes arsenic sector-leading shareholder returns. The valuation lawsuit remains cardinal to the call. RBC said Endeavour trades astatine 0.86 times P/NAV and 4.3 times FY26 estimated EV/EBITDA astatine spot, beneath intermediate golden producers astatine 0.97 times P/NAV and 5.6 times EV/EBITDA, and ample producers astatine 1.1 times P/NAV and 6.1 times EV/EBITDA.

Near-term attraction is expected to centre connected the precocious published Assafou definitive feasibility study, alongside immoderate outgo unit from ongoing conflicts successful the Middle East.

Potential catalysts flagged by RBC see an interim dividend successful the 2nd quarter, updated reserves and resources including Vindaloo Deeps astatine Houndé, imaginable consolidation of the Ity “doughnut”, Sabodala-Massawa method improvements, Lafigué works optimisation and eventual Assafou development.