Jefferies raises First Quantum stock to Buy, aims to reinforce balance sheet

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Jefferies raises First Quantum stock to Buy, aims to reinforce balance sheet
Credit: © Reuters.

On Thursday, Jefferies made a notable change to its rating for First Quantum Minerals (OTC: FQVLF ), listed on the Toronto Stock Exchange under the ticker FM:CN and over-the-counter as FQVLF. The firm upgraded the mining company's stock from Hold to Buy and increased the price target to Cdn$18.00, up from the previous Cdn$13.00. This adjustment comes in the wake of recent strategic announcements by First Quantum (NASDAQ: QMCO ) to enhance its financial position.

The upgrade was triggered by a series of financial measures disclosed by First Quantum. These include the launch of a $1.0B equity issuance in a bought deal format, a $1.6B debt offering, and the amendment and extension of its $2.2B bank facilities, which now feature revised covenants. These initiatives are aimed at reinforcing the company’s balance sheet.

In addition to the equity and debt transactions, First Quantum also announced a $500M copper pre-payment agreement on Wednesday. This agreement is another component of the company's strategy to improve its financial stability and future growth prospects.

Jefferies' positive outlook is based on these recent steps taken by First Quantum, which the firm believes are conducive to the company's financial health. The comprehensive approach to managing its finances has been recognized as a significant move to position First Quantum favorably in the market.

The revised price target and upgraded rating reflect Jefferies' confidence in First Quantum's strategic direction and its potential for stock performance improvement. The new price target of Cdn$18.00 represents an increased level of optimism about the company's future earnings and operational capabilities.

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