Citi trims PT on Australia's Core Lithium on equity raise plans; shares slump

Core Lithium

17/08/2023 02:09

(Updates with share moves in bullets 2 and 3)
    ** Analysts at Citi cut price target on Australia's Core
Lithium  CXO.AX  to A$0.40/share from A$0.50; keeps 'sell'
rating
    ** Stock emerges as biggest loser in the benchmark, slumps
as much as 25.7% to A$0.405; sees biggest intraday pct loss
since March 13, 2020 
        ** Shares lose for a fourth consecutive day and hits
lowest in about two years   
    ** Co on Wednesday announced plans to raise around A$100 mln
($64.18 million) to A$120 mln at a 27% discount
    ** Brokerage surprised at the timing of equity raising and
questions convictions around performance of co's Finniss lithium
project
    ** Citi revisits model valuation estimates on co after
flagging that CXO is facing more ramp-up challenges than other
lithium producers
    ** Estimates EPS dilution in FY24 of 12% and 13% in FY25 
    ** As of last close, stock down 46.8% this year 

    ($1 = 1.5581 Australian dollars)

 (Reporting by Rishav Chatterjee and Archishma Iyer in
Bengaluru)
 ((Rishav.Chatterjee@thomsonreuters.com;))