UPDATE: Bank Of America Initiates Coverage On Stillwater Mining Company On PGM Exposure In Stable Jurisdiction

In a report published Thursday, Bank of America analyst Matthew Griffiths initiated coverage on

with a Buy rating and $17.00 price target. In the report, Bank of America noted, “Stillwater Mining (SWC) is the only US based producer of Platinum Group Metals (PGMs). The company's mines (Stillwater & East Boulder) are located in Montana, US. Our Buy rating is based on (1) growing palladium demand, constrained supply and rising palladium prices (+39% to $1,000/oz over the next three years from $722/oz); (2) the company's target of reducing all-in sustaining cash costs by $100/oz from $833/oz in 2013A is forecast to improve SWC's operating margin (every $10/oz drop in all-in sustaining costs equals ~$4.5mn in FCF); and (3) the company's favorable jurisdictional risk (peers located in Russia & South Africa).” Stillwater Mining Company closed on Wednesday at $14.02.