First Quantum Minerals Ltd.: Price momentum supported by strong fundamentals

First Quantum Minerals Ltd. relative valuation is NEUTRAL and it has a fundamental analysis score of 72.

Our analysis is based on comparing First Quantum Minerals Ltd. with the following peers – Lundin Mining Corporation, Capstone Mining Corp., Teck Resources Limited Class B, Copper Fox Metals Inc., TVI Pacific Inc., Taseko Mines Limited and Superior Copper Corporation (LUN-CA, CS-CA, TCK.B-CA, CUU-CA, TVI-CA, TKO-CA and SPC-CA).

First Quantum Minerals Ltd. has shown underwhelming performance over the last one year while growing strongly over the last month. First Quantum Minerals Ltd.’s price momentum over the last month, at 42.74% has been better than that over the last year, which was -56.12%. Also from a peer group perspective, First Quantum Minerals Ltd. has performed better, since the peer group performance was 11.20% over the last month.

Company Snapshot

• From a peer analysis perspective, relative outperformance last month is up from a median performance last year.

• First Quantum Minerals Ltd. currently trades at a higher Price/Book ratio (0.44) than its peer median (0.36).

• FM-CA‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.

• FM-CA has relatively high profit margins while operating with median asset turns.

• The company’s year-on-year change in revenues and earnings are better than the median among its peer group.

• FM-CA‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.

• The company’s margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.

• While FM-CA‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.

• The company’s level of capital investment seems appropriate to support the company’s growth.

• FM-CA seems too levered to raise additional debt.

• Our analysis rates First Quantum Minerals Ltd. as NEUTRAL relative to its peers.

Share Price Performance

From a peer analysis perspective, relative outperformance last month is up from a median performance last year.

While FM-CA‘s change in share price of -56.12% for the last 12 months is in line with its peer median, its more recent 30-day share price performance of 42.74% is above the peer median. This suggests the company’s performance has improved more recently relative to peers.

Relative Valuation

First Quantum Minerals Ltd. is currently neutrally valued, as its previous close of CAD 8.85 lies within theCapitalCube estimate range of CAD 2.82 to CAD 10.74. Over the last 52 week period, First Quantum Minerals Ltd. has fluctuated between CAD 4.52 and CAD 20.21.