First Quantum Minerals (TSX:FM) is taking advantage of the booming material and energy sectors on the TSX this morning, up nearly 8% at the mid day point.
The copper miner has posted impressive numbers over the last four quarters, either beating or meeting analyst expectations consecutively. Its most notable beat came in its final quarter of fiscal 2018, where the company posted diluted earnings per share of $0.26 when only $0.20 was expected.
Revenue has been on the up and up, as the company has saw an increase in its top line of nearly 60% since 2015, growing at a near 20% pace.
Should you be buying on the run up?
With an RSI of 75, it is clear that First Quantum’s run up may be a little over exerted. As the material and energy sectors continue to build up momentum on the TSX, it is important investors don’t get caught up in buying in during these run ups.
Analysts have a 1 year target price of $11.93 on the copper miner, which indicates only 8.8% upside from today’s levels. There is a large mix of analyst ratings on the company, varying from a strong buy to underperform, but the overall consensus on the stock is a buy.
Analysts expect the company to post earnings growth of 15% annually over the next 5 years, but keep in mind the company is currently seeing quarterly revenue growth shrink by nearly 11% a quarter. With a 5 year PEG ratio of 1.17 and trading at 17 times forward earnings, you’re paying a premium at this current time. First Quantum lags its sector peers on both ROI and ROE, coming in at 2.47 and 4.80 respectively.
The company is ramping up both its copper and gold production, producing 28% more gold and 11% more copper. However, the company has saw its realized copper price drop by $0.15 compared to last quarter, coming in at $2.80 a pound. Obviously with golds run up as of late, First Quantum is seeing a significant increase to the sale price per ounce on its gold production, coming in at $1231 an ounce compared to $1181 in 2018.