Unfortunately for its shareholders the OZ Minerals Limited (ASX: OZL) share price has been amongst the worst performers on the market today.
In early afternoon trade the mining company's shares are down 5% to $8.49.
Why have its shares sunk lower?
Yesterday OZ Minerals saw its share price climb higher following the release of its half-year results.
While these results revealed a solid 25.6% increase in underlying net profit after tax to $80.6 million, two leading brokers weren't overly impressed.
According to a research note out of Credit Suisse, its analysts have retained their underperform rating and $7.30 price target on its shares after reviewing its results.
This price target implies potential downside risk of 14% from the current share price.
Although earnings before interest and tax came in ahead of its expectations, it appears as though its analysts were disappointed to see a significant increase in pre-production capital expenditure.
Elsewhere, a note out of Morgans reveals that its analysts have downgraded OZ Minerals from an add rating to a hold with an $8.95 price target.
This appears to be based more on valuation grounds, rather than concerns over its performance. Which I think is a fair assumption.
After all, based on yesterday's result its shares are changing hands at 31x earnings now. I think this is quite expensive and doesn't offer investors a compelling risk/reward.
In light of this, I would suggest investors stay away from OZ Minerals and focus on other opportunities.
