BMO Capital Cuts First Majestic Silver Price Target By 7%

  • BMO Capital analyst Ryan Thompson lowered the price target on First Majestic Silver Corp FR NYSE: AG) to C$12 from C$13 while maintaining the Market Perform rating on the shares.
  • First Majestic is an intermediate primary silver producer with three operating mines in Mexico.
  • The analyst states that the consolidated Q1 gold and silver production missed estimates by 14% and 19%, respectively. 1Q22 production represents ~20% of the mid-point of full-year silver guidance and ~22% of the gold guidance.
  • Thompson adds that silver production was lower than expected at Santa Elena and San Dimas due to a rise in COVID-19 cases earlier in the quarter.
  • On the gold side, Jerritt Canyon grades were lower than expected. Thompson trimmed the 1Q22 EPS expectation.
  • Recently, First Majestic released Q1 production results, with a total production increase of 59% year-over-year. The company produced 7.2 million silver equivalent ounces consisting of 2.6 million ounces of silver and 58,892 ounces of gold.
  • Meanwhile, production decreased by 16% sequentially due to high absenteeism related to an increase in COVID-19 cases in January and February, which resulted in lower processed tonnes across all Mexican operating units.
  • Price Action: FR shares are trading lower by 4.44% at C$16.77 on TSX, and AG is lower by 4.64% at $13.25 on NYSE on the last check Tuesday.
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