Thoughts on Perenti Ltd (PRN)
Can you please review PRN? The company appears to be floundering recently. Thanks
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Answer
Hi ,
The mining services contractor has come under pressure despite already announcing ~$420m worth of contract extensions this side of the new year. Mining services are highly leveraged plays on mining investment and news flow in the space has largely been one way with a number of mine expansions, new mines and plenty of capex being postponed, particularly in lithium and nickel. Perenti (PRN) has ~1/3 of revenue coming from battery minerals projects, an area of the market that has been under significant pressure. While we expect some support to kick in for the space, it is a coin toss as to whether this will lead to an increase in investment which would support PRN’s earnings. We prefer others in the space, namely SRG Global (SRG) & Mineral Resources (MIN).
