Broker ups Providence target price
Published 17/01/2012 | 05:00
PROVIDENCE Resources was boosted yesterday after a City broker upped its target price for the company.
Numis Securities raised its net asset value for Providence to 446p, citing the company's "portfolio of very high impact exploration wells".
In a note to clients, Numis analyst Matthew Lambourne said Providence "continues to look materially undervalued".
Mr Lambourne added that the higher target price in part reflected the increased exposure the company now had to Barryroe, while the higher exposure to the Dragon gas discovery off the Wexford coast could also be a positive if it became commercially viable.
The Irish company secured another licence from the UK last month that covers part of Dragon, which straddles UK and Irish waters, while the firm raised its stake in Barryroe to 80pc just before Christmas.
"With a 73pc upside to our target price we believe Providence continues to look materially undervalued. We think the market is overpricing . . . the uncertainty of commercialising Barryroe."
Providence closed down 3.33pc at €3.19 in Dublin and up 0.7pc at 259.75p in London.