Lundin Mining (TSX:LUN): Reassessing Valuation After Supreme Court Clears 2017 Candelaria Class Action to Proceed

Lundin Mining (TSX:LUN) is back in focus after the Supreme Court of Canada let a securities class action over its 2017 Candelaria Mine rockslide disclosures move ahead, sharpening attention on its legal overhang.

See our latest analysis for Lundin Mining.

Even with the legal overhang back in the spotlight, Lundin Mining’s CA$26.74 share price sits on the back of a powerful 63.05 percent 3 month share price return and a standout 217.91 percent 5 year total shareholder return. This suggests momentum has been building rather than fading.

If this kind of risk reward shift has your attention, it could be worth exploring other materials names with solid balance sheets or fast growing stocks with high insider ownership as potential next ideas.

With Lundin Mining now trading slightly above analyst targets despite modest revenue growth and a live class action risk, investors must ask if today’s price is a springboard for further gains or whether upside is already priced in.

Most Popular Narrative: 8.9% Overvalued

Compared with the narrative fair value of roughly CA$24.55, Lundin Mining’s CA$26.74 last close leans to the rich side and raises bigger questions about what is being priced in.

The analysts have a consensus price target of CA$17.201 for Lundin Mining based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$21.08, and the most bearish reporting a price target of just CA$14.04.

Read the complete narrative.

Want to see how flat revenues, widening margins, and a punchy future earnings multiple still add up to that fair value? The tension in those assumptions may surprise you.

Result: Fair Value of $24.55 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, concentrated copper exposure in South America and capital intensive expansion projects leave the narrative vulnerable to commodity swings and execution setbacks.

Find out about the key risks to this Lundin Mining narrative.

Build Your Own Lundin Mining Narrative

If you see the numbers differently or want to stress test your own assumptions, you can build a complete narrative from scratch in minutes: Do it your way.

A great starting point for your Lundin Mining research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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