Seeking Alpha

Molycorp target lowered to $5, EPS outlook slashed at Goldman

  • Molycorp (MCP -17.9%) is maintained with a Neutral rating at Goldman Sachs, but the firm cuts its 2013-15 earnings estimates and lowers its price target to $5 from $6 after MCP announced a $200M capital raise due to lower expectations of future revenue and cash flow.
  • Goldman sees MCP's latest round of fundraising as an indication of continued operational challenges in ramping the Mountain Pass rare earths facility, and notes the $100M increase in the project's overall budget continues a series of cost overruns.
  • But the firm believes the remaining targeted capex of $50M-$70M in Q4 and $70M in 2014 to complete Mountain Pass appears doable assuming a successful capital raise; also, improving rare earth fundamentals could be reflected moving into year-end results.
Comments (1)
  • NC-Investor75
    , contributor
    Comments (8) | Send Message
    Goldman oversees the secondary!
    20 Oct 2013, 11:15 AM Reply Like
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