Broker Berenberg has set a 220p price target for Tharisa (THS ), the South African miner of chrome and platinum group elements, following a bumper set of interim results.

Tharisa’s revenues were ahead of Berenberg’s forecast, at US$359 million, while costs were in line, at US$252 million. 

“As such, gross profit was a beat at US$109 million, versus our US$95 million estimate, with EBITDA of US$104 million beating our US$95 million,” wrote Berenberg in a flash note. 

“Higher other operating expenses, driven in part by higher share-based payments, of US$39 million versus our US$30 million took operating profit to US$72 million, versus our US$62 million forecast, while profit before tax of US$70 million was better than our US$61 million. Tax, in line with our US$47 million, EPS of 15.8c, versus our 15.5c.”

Tharisa has benefitted in recent months from steady production and elevated commodity prices, and has taken the opportunity to undertake significant expansion. The Tharisa mine, currently operating as an open pit, is now also in development as an underground mine. And the company is also developing an additional project in Zimbabwe.

“The company’s Tharisa mine in South Africa is operating stably and this provides a strong base for growth,” continued Berenberg. 

“First, underground development at Tharisa is progressing well and we would expect work here to ramp up in the coming months towards first production later this year. Second, and key to a share price re-rate, we think, is the Karo project in Zimbabwe. Management notes that construction activities remain on track, and that it has made ‘significant headway in structuring and negotiating facilities to achieve project completion’. US$21 million was spent on Karo in the first half and we expect this spend to ramp up further in the second half, with the announcement of a funding package for the mine a key catalyst for the shares, we think.”

Tharisa’s current share price is 127p, but Berenberg sees significant scope for that to go higher. 

“We update our model for the first half results and make some adjustments to our capex phasing for the Tharisa mine and the Karo project,” the broker said. 

“Our updates result in modest changes to our estimates. We remain Buy-rated, with a 220p price target, with the shares trading on 0.58x NAV and 2.8x FY26E EBITDA. With clear catalysts coming, we think the shares present compelling value.”

 

View from Vox

 

Berenberg isn’t the only one with an aggressive target for Tharisa. Tamesis goes even higher, setting a target of 300p. BMO, however, is less punchy, setting a more modest target of 150p. In general, though, analysts are unanimous that there is significant upside on offer at Tharisa, and it’s hard to argue with their opinion – the company has a strong track record of production, is operating in a very favourable commodities pricing environment, and has significant plans for growth.