The Globe and Mail reports in its Wednesday, March 6, edition that CIBC World Markets analyst Cosmos Chiu, citing "heightened" execution risk, downgraded Fortuna Silver Mines to "neutral" from "outperform" with a share target of $6.25, down from $7.50 and below the consensus of $7.05.
The Globe's David Leeder writes in the Eye On Equities column that Mr. Chiu says in a note: "After the announcement of the six month delay in the start-up of Lindero in late-February, and ahead of the release of financials in mid-March, we have taken the opportunity to update our model. Our NAV decreases by 4 per cent, and 2019 estimated CFPS is down 54 per cent. At deck, FVI shares currently trade at 0.9 times P/NAV and nine times P/CF, a slight discount to the silver group at 1.2 times P/NAV and 10 times P/CF. As we enter a seasonally weaker period for precious metals, we see no compelling near-term catalyst to stimulate a rerate of FVI shares. We believe the hiccups at Lindero have changed the thesis of the story. On one hand, the start-up of Lindero will decrease FVI's silver exposure to 35 per cent, and some investors looking for silver exposure will turn to more 'pure-play' names, including PAAS."
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