Cheap ASX 200 stocks with P/E less than 10: Which have big potential upside?
West African Resources has a P/E of just 7 with 68% upside to consensus prices. But here's the catch
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Mentioned
KEY POINTS
- There are currently 18 ASX 200 stocks with P/Es of less than 10
- West African Resources trades at a P/E of just 6.9 with 68% upside to consensus target prices
- Only 5 of the low P/E stocks are forecast to grow earnings in 2024, while others may see P/Es rise due to weak earnings
The low price-to-earnings scan locates ASX 200 stocks with P/Es of less than 10 and identifies those with the largest share price upside.
There are currently 18 ASX 200 stocks with trailing P/Es of less than 10.
12 of the companies are from the Materials and Energy sector
The average 1-year performance is -7.4%
The average consensus price target is 12.1% above current levels
The Cheapest ASX 200 Stocks
The below data is sorted from lowest to highest P/E.
Ticker | Company Name | Close Price | P/E | 1-Year | Target Price | Upside |
|---|---|---|---|---|---|---|
Whitehaven Coal | $8.13 | 2.66 | -9.36% | $8.08 | -0.62% | |
New Hope Corp | $5.38 | 4.46 | -17.48% | $4.78 | -11.15% | |
Karoon Energy | $1.91 | 4.63 | -15.25% | $2.64 | 38.58% | |
Pilbara Minerals | $3.56 | 4.74 | -11.88% | $4.00 | 12.36% | |
Helia Group | $4.45 | 4.95 | 65.43% | $3.69 | -17.08% | |
Perseus Mining | $1.80 | 5.67 | -22.75% | $2.33 | 29.44% | |
Qantas Airways | $5.17 | 5.83 | -21.19% | $7.46 | 44.29% | |
Woodside Energy | $31.63 | 6.06 | -15.20% | $33.65 | 6.39% | |
Graincorp | $7.39 | 6.6 | -2.12% | $8.70 | 17.73% | |
Iluka Resources | $6.74 | 6.64 | -35.50% | $7.79 | 15.58% | |
West African Resources | $0.98 | 6.88 | -25.00% | $1.64 | 68.21% | |
Coronado Global | $1.73 | 8.26 | -16.67% | $2.07 | 20.00% | |
Spark New Zealand | $4.88 | 8.61 | 0.21% | $4.75 | -2.66% | |
National Storage | $2.25 | 8.64 | -2.17% | $2.37 | 5.33% | |
Beach Energy | $1.61 | 8.96 | -0.31% | $1.75 | 9.03% | |
Magellan Financial | $8.93 | 9.06 | -7.46% | $7.96 | -10.86% | |
Santos | $7.83 | 9.65 | 6.68% | $8.51 | 8.68% | |
Harvey Norman | $4.28 | 9.81 | -2.51% | $3.63 | -15.19% |
Target price' is an aggregate of Refinitiv broker target prices. Data as at Monday, 15 January 2024.
The Biggest Upside
West African Resources boasts the largest consensus upside of 68.2%. The company operates the Sanbrado Gold Mine and Kiaka Gold Project in Burkina Faso, with a pretty solid track record of meeting and exceeding production guidances.
But as you might know, Africa-based miners tend to trade at a substantial discount to ex-African peers due factors such as geopolitical risks, military coups and sovereign risks.
Last week, West African Resources announced 2023 gold production of 226,823 ounces, within its guidance of 210-230,000 ounces.
Over the next 3 years, Macquarie expects the company to deliver the following production and cost figures:
2024 – 201,800 ounces of gold at AISC of US$1,026 an ounce
2025 – 339,600 ounces of gold at AISC of US$1,035 an ounce
2026 – 407,500 ounces of gold at AISC of US$1,175 an ounce
West African Resources has a pretty clear runway to producing more than 400,000 ounces of gold per annum at a relatively competitive AISC.
But this narrative is nothing new and the stock has been subject to large consensus upside for quite some time.
Only Five Stocks Are On Track to Grow Earnings
When reporting season hits, trailing P/Es for many bargain-priced stocks are likely to rise as earnings fall.
For example, Pilbara Minerals might trade on a P/E of 4.7 but lithium prices have slumped more than 80% compared to a year ago.
There are only five stocks that are forecast to grow earnings in FY24. These are:
West African Resources
Qantas
Karoon Energy
National Storage
Spark New Zealand
