Analyst Actions: Credit Suisse On the North American Platinum Group Metals Sector


Back to the drawing board with a rethink of the precious metal valuation approach; DOWNGRADING PTM.TO to Neutral; Revising Ests & TPs

We have gone back to the drawing board on the North American PGM sector. In our first update since the recent transfer of coverage we rethink the entire precious metal equity valuation approach, introduce new company models and new global comps. For the experienced precious metals investor, this report includes:

An assessment of the precious metal valuation approach - specifically the use of 'precious metal equity premiums'. We consider the impact that ETFs have had on sector valuations and ask whether it is reasonable to use sector specific valuation methods for precious metal equities going forwards.

Detailed project and company comps - including 20 listed equities and 96 deposits/projects covering numerous physical and financial metrics.

For the less experienced precious metals investor, we also cover:

Asset reviews and discussions around key issues for each stock.

Insights, images and data collected from our recent site visits to Eastern Platinum's (ELR.TO) CRM mine and Eastern Limb project (South Africa),

North American Palladium Ltd's (PDL.TO) Lac Des Iles mine (Canada), and Platinum Group Metals' (PTM.TO) WBJV project (South Africa).

Our new target prices and recommendations are:

Eastern Platinum (ELR.TO), OUTPERFORM, TP C$0.65/sh (C$1.25/sh)

North American Palladium (PDL.TO), OUTPERFORM, TP C$3.80/sh (C$5.75/sh)

Platinum Group Metals (PTM.TO), NEUTRAL (from Outperform), TP C$2.10/sh (C$2.00/sh)

Stillwater Mining ( SWC ), OUTPERFORM, TP US$16.00/sh (US$17.00/sh)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: SWC

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