Bloomberg News

Petropavlovsk Slumps as Goldman Halves Price Estimate on Costs

July 16, 2012

Petropavlovsk Plc (POG), a London-listed producer of gold in Russia, retreated after Goldman Sachs Group Inc. almost halved its price estimate, citing rising costs and high leverage.

Petropavlovsk dropped 2.1 percent to 452 pence by 11:51 a.m. in London.

Goldman Sachs cut its 12-month price estimate to 520 pence from 980 pence today, according to an e-mailed note.

Risks to the stock’s valuation include “rising costs” and “relatively high leverage and capital expenditure limiting scope for debt repayment and upside in dividends in the near term,” Yulia Chekunaeva and other analysts wrote in an e-mailed research note.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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