A positive outlook for molybdenum [moly] combined with more in-house production bodes well for Thompson Creek Metals Company Inc. (TC), according to new coverage from Deutsche Bank analyst Jorge Beristain.
Mr. Beristain initiated Thompson Creek, one of the largest listed pure play moly companies, with a "buy" rating and $32 price target, telling clients in a note that strong moly demand is underpinned by expectations of strong global steel production and shifting industry cost structure.
The analyst also said Thompson Creek can expect a boost in earnings growth through 2010 thanks to a production ramp up and a shift in sales mix toward greater in-house produced molybdenum.
He added that lower moly prices, as well as an appreciating Canadian dollar, and participation in future M&A activity could all undermine is recommendation.
On Monday, Thompson Creek shares closed up $0.24 to $20.