BMO Capital upgrades Metalla Royalty stock rating on improved outlook

BMO Capital upgraded Metalla Royalty & Streaming Ltd. (MTA) to Outperform from Market Perform, raising its price target to Cdn$8.00 from Cdn$7.00. The upgrade is driven by an anticipated turning point in the second half of 2025, when new assets are expected to come online and significantly improve cash flow, potentially leading to a stock re-rating. BMO noted that MTA shares have underperformed peers and currently trade at a meaningful discount to net asset value despite a slower portfolio start to 2025.

Analysis

BMO Capital has upgraded Metalla Royalty & Streaming Ltd. (MTA) to Outperform from Market Perform, increasing its price target to Cdn$8.00 from Cdn$7.00. The upgrade is based on a forward-looking catalyst, with BMO identifying the second half of 2025 as a significant turning point for the company. This optimism is driven by the expectation that new assets will come online, materially improving Metalla's cash flow profile. The analysis highlights that Metalla's shares have significantly underperformed peers, declining over 50% since March 2021, which has resulted in the stock currently trading at a 'meaningful discount to NAV'. Despite acknowledging a 'slower portfolio start to 2025', BMO's thesis is that the anticipated operational improvements in late 2025 should serve as the primary driver to 'underpin a re-rating' of the stock, thereby closing the valuation gap.

Key Decisions for Investors

• Investors with a longer-term investment horizon could view the stock's current valuation, described as a 'meaningful discount to NAV', as a potential entry point ahead of the expected cash flow inflection in H2 2025.
• The investment thesis is heavily dependent on future execution, so it is crucial to monitor company progress reports on the development of new assets to ensure the 2025 timeline remains on track.
• Given the stock's historical underperformance, investors should benchmark MTA's valuation and asset portfolio against its royalty and streaming peers to independently verify the extent of the discount and relative risk-reward profile.