CIBC World Markets Inc. analyst Adam Gill reinstated his estimates for Freehold Royalties Ltd. (TSE:FRU) following closing of financing. The brokerage maintained its "Sector Performer" rating and $22 price target on shares of FRU.
Gill said he is reinstating estimates following the closing of Freehold's financing, whereby the company issued 3.45 million common shares (including a 450,000 overallotment) at $20.50/share for gross proceeds of $70.725 million.
With the closing of this financing, the analyst believes Freehold is well poised to make further royalty acquisitions to bolster production in the coming years. 2012 D/CF is now 0.2 times, down from 0.8 times previously.
Gill said his core NAV decreases slightly to $13.11/share from $13.20/share previously. His 2012 CFPS decreases by 3% to $1.82/share. Freehold is expected to release its year-end results on March 14.
Freehold trades at a premium to the group, with the company at 11.3 times 2012 EV/DACF versus the group at 7.8 times. However the analyst believes Freehold should trade at a premium to the group given its low capital requirements and strong balance sheet.
FRU is trading down 0.24% at $20.48 on Thursday.