The average target price of PRU.AX is 4.1 and suggests 13% upside potential. Usually, this means a HOLD recommendation among investment firms. This neutral recommendation suggests no significant price movement, up or down, in the next 12 months. The most optimistic analyst has a target price of 5.0. This translates into 38% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 2.4. This is equivalent to 35% downside potential in the worst case. 

Perseus Mining Limited explores, evaluates, develops, and mines for gold properties in West Africa. The company primarily holds interests in the Edikan gold mine project located in Ghana; and Sissingué and Yaoure gold projects located in Côte d'Ivoire. Perseus Mining Limited was incorporated in 2003 and is based in Subiaco, Australia.

Australia

Perseus Mining Limited

Basic Materials

The company tries to pay dividends regularly but only sometimes does so. It has paid dividends in roughly half the past ten years. Dividend per share (DPS) has grown yearly, and there is a clear trend. In the past 12 months, the dividend yield has been moderate and on par with its peers. On average, the company pays dividends annually. 

PRU.AX reported revenue of AUD 1 745mn in the last 12 months, up 15% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 24% from FY23 to AUD 0.42. Market expects EPS to reach AUD 0.37 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 14ppts over past six months and grown 1ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported very strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 58.6% in the last 12 months, a decline from 60.1% in FY24. 

Historically, PRU.AX has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 31.9%, down from 72.2% in FY24. 

Perseus Mining Limited reported a return on equity (RoE) of 20.6% in the last 12 months, down from 20.6% in FY24. The market consensus projects an RoE of 21.0% in FY25, this time above its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 17.9%, below the peers. The consensus estimate for FY25 for RoCE is 11.8%, again behind the peers. 

Another important profitability metric, return on assets (RoA), amounted to 16.5% in the last 12 months, a decrease from 16.6% in FY24. The market analysts predict that RoA will be 17.1% in FY25, again stronger than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 3.3 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

PRU.AX has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually very stable and is average on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is minimal. We note resilient historical revenue growth, robust profitability, solid return on capital, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, excessive margin volatility, and poor working capital management.

In highly turbulent market conditions, PRU.AX is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, PRU.AX is as volatile as an index. Put differently, without outstanding market volatility or shocking company news, the stock's price will move with the index. The stock's losses on its worst days (less than 1-5% of the time) will range from limited to average. 

Considering past and projected metrics, the stock is slightly 'cheaper' than its peers. In particular, the stock is underpriced on P/E, 'cheap' on EV/EBITDA, trading at neutral levels on P/FCF. 

Perseus Mining Limited

A$ 3.4

6

Perseus Mining Limited

A$ 3.4

6

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

A$ 3.4

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