On February 14th, BMO Capital Markets upgraded IAMGOLD Corporation (TSX: IMG) from market perform to outperform and raised their 12-month price target on the stock to US$3.25 from US$2.75. This follows the firm completing negotiations with an activist investor. With this, IAMGOLD is expected to replace 5 of its 9 directors by the May 2022 annual general meeting. This comes after IAMGOLD publicly rejected the shareholders demands.
They believe that the renewed board of directors will “flow-through” the line management. They upgraded IAMGOLD “on expectations of improved execution and strategic vision for the company going forward.”
IAMGOLD currently has 10 analysts covering the stock with an average 12-month price target of C$3.87, or a 2% upside to the current stock price. Out of the 10 analysts, 3 have buy ratings, 6 have hold ratings and a single analyst has a sell rating on the stock. The street high sits at C$5.50 from TD and represents a 45% upside to the stock price.
BMO calls these corporate changes a “promising pivot” as they believe that this conclusion shows that IAMGOLD is coming into the discussions with a positive and open mind. They expect that the renewed board will help put a fresh set of eyes on the management at the company.
They expect that the first thing the board will do is appoint a permanent CEO. The next item they are hoping the board will do is appoint a known “turnaround” expert, who has experience with Canadian mining operations. They believe that this will help boost confidence and allow the current interim CFO, Daniella Dimitrov, to focus on optimizing the balance sheet.
Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.