H.C. Wainwright has trimmed its price target for Nouveau Monde Graphite Inc. (NMG) to $5.50 from $7.50, but the brokerage maintained a Buy rating on the stock.
The firm said the primary reason for the reduction was dilution tied to NMG's recent equity raise. In addition, the analyst pushed the projected first production date back to the first half of 2028, a delay that weighed on the updated valuation.
Even after the cut, the new target represents a notable premium to NMG's current share price of $2.67, which is trading close to what the market currently considers fair value. Analysts overall remain biased toward the bullish side, with a consensus recommendation of 1.5 - a position between Strong Buy and Buy - and individual price targets that span from $4.87 to $7.79.
H.C. Wainwright revised its discounted cash flow (DCF) model for NMG's Matawinie and BBMP operations, producing a project net asset value (NAV) of $919.0 million, which translates to $3.51 per share when using a 10.0% discount rate for both assets. The firm's valuation approach also incorporated NMG's reported cash balance of $68.8 million, less $11.6 million in debt, and assumed conservative, market-based pricing for the company's end products, including graphite concentrate, CSPG 20, CSPG 10, 50 mesh, and byproduct fines.
To arrive at the final $5.50 target, the analyst applied a 1.5x NAV multiple, citing ongoing asset de-risking, political interest in the company, and the relative strength of NMG's balance sheet as supporting factors.
Additional balance-sheet and leverage metrics noted alongside the valuation show moderate indebtedness. Data cited in the analysis indicate a debt-to-equity ratio of 0.4 and total debt of $14.22 million compared with a market capitalization of $431.47 million.
Analysis context - The lowered target reflects two concrete adjustments to the previous model: a dilution effect from fresh equity issuance and a revised operational timetable that delays cash flows until at least the first half of 2028. Those inputs reduced the headline valuation despite the continued Buy rating.
What remains unchanged - The firm kept conservative pricing assumptions for finished products and preserved a disciplined discount rate in its DCF work. The combination of a positive NAV multiple and a solid cash position helped sustain an above-current-price objective.