June 24, 2019 / 7:23 AM / 6 months ago

BUZZ-Petra Diamonds: Falls; RBC cuts PT to street low on persistent pricing pressures

** Miner Petra Diamonds Ltd’ shares down ~2.1% at 21.1p, after RBC Capital Markets slashes price target to 23p from 40p; the lowest across brokerages

** RBC says pricing pressures for diamonds in the small end of the market could persist for now, also cuts co’s 2020 EBITDA estimate by 29% to $186 mln

** “Diamond prices have had a tough 4 years as headwinds from softer demand have been exacerbated by reduced credit availability in the mid-stream,” RBC says

** Brokerage also cites co’s high financial leverage, says capital structure remains a concern

** “Whilst liquidity is not an issue, we do see deleveraging as likely to be slower than in our prior forecasts” - RBC

** RBC maintains “sector perform” rating, says it remains constructive about diamond prices from later in 2020 as falling mine production, steady demand growth should move prices higher

** 8 of 13 brokerages tracking the stock rate it “buy” or higher, 5 “hold”; their median PT is 35p - Refinitiv data

** Stock down ~43% YTD (Reporting by Shariq Khan in Bengaluru)

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