The firm said it lowered its rating on the diversified mining company as Thompson Creek is exiting the moly business as prices fall.
The company announced that it will be placing its Endako molybdenum mine on temporary suspension effective at the end of the year, as management says profitability is no longer sufficient with current molybdenum prices, Deutsche Bank said.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Current prices for the chemical element are $8.89 per pound.
"Moly prices were as high as $14.74 per pound earlier this summer, providing a boost to the company's earnings over the past two quarters. Since the beginning of the 2014 fourth quarter moly has fallen more than 30% to the lowest price seen this year," Deutsche Bank added.
Shares of Thompson Creek Metals are lower by 4.17% to $1.38 at the start of trading this morning.
Separately, TheStreet Ratings team rates THOMPSON CREEK METALS CO INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate THOMPSON CREEK METALS CO INC (TC) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 180.4% when compared to the same quarter one year ago, falling from $13.80 million to -$11.10 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.20%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 183.33% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, THOMPSON CREEK METALS CO INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- THOMPSON CREEK METALS CO INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, THOMPSON CREEK METALS CO INC continued to lose money by earning -$1.28 versus -$3.24 in the prior year.
- TC's debt-to-equity ratio of 0.91 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that TC's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.84 is high and demonstrates strong liquidity.
- You can view the full analysis from the report here: TC Ratings Report