Kinross Gold Corporation

KGC Details

Kinross Gold Corporation (NYSE: KGC) is a Canadian gold mining company engaged in producing and selling gold and silver and other related activities, including exploration and acquisition of gold-bearing properties, the extraction and processing of gold-containing ore, and reclamation of gold mining properties.  KGC has mining operations in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana, and Mauritania.

Share Repurchase Program & Quarterly Dividend: On July 28, 2021, KGC received approval from the Toronto Stock Exchange (TSX) to initiate the Normal Course Issuer Bid (NCIB) program, which authorizes the company to buyback 63.10 million of its common shares, representing 5% of the total 1.26 billion shares outstanding as of July 27, 2021. KGC can now make purchases during the period beginning August 03, 2021, to August 02, 2022, through the facilities of TSX, NYSE, or any other Canadian trading system limited to 0.99 million shares per day, representing 25% of the average daily volume for H1FY21. Concurrently, KGC declared a quarterly dividend of USD 0.03 per common share, paid on September 02, 2021, to shareholders of record on August 19, 2021.

Redemption of 5.125% Senior Notes: On June 01, 2021, KGC redeemed all of its outstanding USD 500 million aggregate principal amount of 5.125% senior notes due September 2021, along with accrued and outstanding interest.  The redemption was initially announced on April 29, 2021.

Q2FY21 Results: The company reported a YoY decline of 0.63% in metal sales to USD 1.00 billion in Q2FY21 (ended June 30, 2021) compared to USD 1.01 billion in Q2FY20, primarily due to a decline in attributable sales volume partially offset by favorable pricing. Net income for the company reduced to USD 119.3 million in Q2FY21 vs. USD 195.7 million in Q2FY20. As of June 30, 2021, the company had cash & cash equivalents (including short-term deposits) of USD 675.6 million and total debt of USD 1.50 billion.

Key Risks: Prices of gold and silver on the global market, which are highly volatile and uncontrollable, significantly impact KGC's business. Hence, any unfavorable movement in their prices could negatively impact its financials. In addition, KGC operates as a gold mining company, which is subject to several federal and state regulations. Therefore, the issuance of stricter regulations or non-compliance with required laws could adversely affect the company's profitability.

Outlook:

Production and Cost Guidance (Source: Earnings Presentation, July 29, 2021)

Valuation Methodology: Price/Cash Flow-Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

KGC Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: KGC's stock price decreased 18.42% in the past six months and has breached its previous 52-week range of USD 5.62 to USD 10.32. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 36.78. We have valued the stock using the Price/Cash Flow-based relative valuation methodology and arrived at a target price of USD 6.83. Considering the correction in the stock price, decent balance sheet, current valuation, and associated risks, we recommend a "Buy" rating on the stock at the current price of USD 5.58, down 4.94% as of September 16, 2021, 3:21 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Tupperware Brands Corporation

TUP Details

Tupperware Brands Corporation (NYSE: TUP) is a consumer products company engaged in designing, manufacturing, and distributing storage and serving products for the kitchen and home through the Tupperware brand. TUP sells its products in more than 80 countries, primarily through its 3.2 million independent representatives worldwide.

Taking Steps Towards Better Environment: On August 25, 2021, TUP collaborated with National Park Foundation to launch four reusable limited-edition products (sandwich and snack keepers, To-Go cup, and water bottle), inspired by the beautiful scenery of the country's national parks. This launch aims to encourage adventure goers to keep parks fresh and clean. Apart from this launch, the collaboration has supported the installation of new water refill stations (expected to reduce ~10 million single-use plastic bottles from landfills each year), composting and recycling infrastructure, and waste reduction education across the National Park System.

Payment of Debt and Share Repurchase Program: On June 21, 2021, TUP announced the prepayment of USD 58 million of its term loan debt from Angelo Gordon and JP Morgan. Concurrently, its board approved a repurchase program to buy back common shares worth USD 250 million. As per Sandra Harris, its COO and CFO, the prepayment of term loan can be accredited to improved financial position in the past 18 months, reflecting the success of its ongoing turnaround plan.

Q2FY21 Results: The company reported YoY growth of 16.94% in net sales to USD 464.7 million in Q2FY21 (ended June 26, 2021) compared to USD 397.4 million in Q2FY20 (ended June 27, 2021). Net income for Q2FY21 reduced to USD 35.6 million from USD 63.8 million in Q2FY20. As of June 26, 2021, the company had cash & cash equivalents of USD 107.3 million and total debt of USD 635.1 million.

Key Risks: TUP's ability to reach its consumers is dependent on independent sales organizations and representatives. Hence, any interruption in the distribution network could affect its financials. In addition, TUP conducts its business in many currencies other than USD, which makes it vulnerable to exchange rate fluctuations. Though it has taken currency forward contracts to mitigate the fluctuation in prices, still this risk persists. Therefore, any unfavorable movement in the exchange rates would have an unfavorable impact on the company's financials.

Valuation Methodology: Price/Earnings Per Share Based Relative Valuation

 (Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

TUP Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: TUP's stock price decreased 19.78% in the past six months and is currently leaning towards the lower band of its 52-week range of USD 18.62 to USD 38.59. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 38.97. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 26.73. Considering the correction in the stock price, recent product launches, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 21.66, up 0.28% as of September 16, 2021, 12:09 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

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