Analysguiden maintains a bullish outlook on Grangex, despite the stock's sharp rally over the summer months.
The release of the new Definitive Feasibility Study (DFS) for Sydvaranger has improved visibility and highlighted additional value, according to Analysguiden's commissioned analysis.
“In our previous report, we wrote: '…the value of Sydvaranger for Grangex shareholders … somewhere between 40-50 SEK per share.' So, has the train left the station? Or does it still make sense to buy the stock at these levels? The historical share price movement is largely irrelevant. The ball must be played where it lies, based on fundamentals and risks. From here, the upside potential remains significant--perhaps as much as 4-5 times higher--but the risks are also considerable, as clearly evidenced by the stock’s volatility in recent months,” Analysguiden writes.
Based on this assessment, Analysguiden once again recommends investing in Grangex, but advises investors to ensure that the position size fits appropriately within their portfolio.
“We still believe that a doubling of the share price to around 80 SEK would not be unreasonable, before we know the outcome of the financing. After that, the risk decreases again and it becomes easier to estimate the potential returns for Grangex shareholders from the project. The green argument, as before, can be added to the positives,” the analysis firm continues.
