Credit Suisse has raised its rating for Eurasian Natural Resources Corp (ENRC) from 'neutral' to 'outperform', saying that it foresees catalysts ahead for the mining company.

The broker said on Monday morning: "Our cautious stance in H212 was due to concerns over earnings, balance sheet and M&A. We think downside risks are now limited with potential re-rating catalysts in 2013. Importantly, the company's acquisition run has finally ended and could kick into reverse with small divestments in '13/14 in our view."

Credit Suisse also reckons that earnings expectations are now "more realistic" and margins should improve in this year and the next.

"With a stable cycle the shares offer significant optionality on earnings growth into 2014/15 as a large part of the asset base moves from development to production (not currently priced in by the market). We think it is time to revisit and we upgrade."

Credit Suisse has raised its target price for the shares from 350p to 400p, saying that the shares are trading at 13.8 and 9.6 times 2013 and 2014 earnings, respectively, a discount to the peer group.

Successful growth delivery could see the shares rise to around 500p, the broker added.

The stock was trading 1.42% at higher at 327.19p by 09:11 on Monday.

BC

Related share prices
Eurasian Natural Resources Corp. (ENRC) share price