• Ord Minnett says Aeris Resources could almost double
  • Cogstate to benefit greatly from Alzheimer’s clinical trials


Could Aeris Resources go from 48c to 90c?

Broker Ord Minnett has a Buy recommendation on diversified miner Aeris Resources (ASX:AIS), with a target price of 90c vs the current price of 48c.

The broker says it continues to see upside in AIS despite the company revising to lower production.

AIS had earlier released a softer Q3 result where it downgraded FY23 copper production (~6kt Cu), and EBITDA guidance (~$50-70m).

The company said it was the victim of a rainy summer in northern Queensland after heavy rainfall in the normally termed Sunshine State.

In March however, Aeris struck what looked to be a new massive sulphide lens at its Jaguar mine in WA.

Acquired only last year in a $234 million deal to mop up the base metals assets of Washington H. Soul Pattinson, now Aeris’ top shareholder, the mine has regularly delivered new orebodies across several years of operations.

To see this value unlocked, Ord Minnett says investors will need to see demonstrated delivery in Q4 and 1H24 to guidance and market expectations.

“This, in our view, would improve the markets confidence in AIS’s ability to not only deliver on these longer-term organic growth value opportunities, but self-fund them as well through operating cash flows,” said the broker’s note.

Ord Minnett has reduced its target price on AIS from 93c on 90c after the production downgrade.

“Our target price falls 3% due to the lower forecast near term cash flow. However re retain our Buy recommendation with 89% TSR,” said Ord Minnett.


Cogstate shares to surge on Alzheimer’s research

Broker CCZ Equities has a target price on healthcare stock Cogstate (ASX:CGS) of $2.18, versus the current price of $1.64.

Cogstate is involved in the validation and commercialisation of digital brain health assessments, as well as provision of quality assurance services in clinical trials.

Last week, Cogstate partner, US-based Eli Lilly, announced positive results of the TRAILBLAZER-ALZ 2 Phase 3 study showing that its investigational treatment, Donanemab, significantly slowed cognitive and functional decline in people with early symptomatic Alzheimer’s disease (AD).

Based on these results, Lilly has stated that it will proceed with global regulatory submissions as quickly as possible, with a submission to the US FDA in sight this quarter.

Separately, the upcoming FDA advisory committee meeting (9 Jun-23) and final decision (6 Jul-23) for Lecanemab is the next major event in AD research.

Industry experts anticipate full approval to be granted, which would set a precedent for similar drugs like Donanemab.

“The significance of this approval lies in providing a clear regulatory and reimbursement pathway for future drug developments,” said the note from CCZ.

CCZ believes Cogstate is well-placed to benefit from AD research growth due to its track record supporting large clinical trials, and deep relationships with pharmaceutical companies.

“CGS’ current 9.7x FY24 EV/EBITDA valuation seems understated given its strong foothold in the rapidly expanding AD research market,” said the broker.



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