Sales came up lighter than expected in the latest quarter from 5N Plus (5N Plus Stock Quote, Chart, News TSX:VNP) but Laurentian Bank Securities analyst Nick Agostino likes the company\u2019s shift to more value-added products. In an action note to clients on Wednesday Agostino reiterated his \u201cBuy\u201d rating and raised his price target from C$2.75 to C$3.00, representing a projected 12-month return of 63.9 per cent at the time of publication. Montreal-based 5N Plus is a fully integrated primary\/secondary leading refiner of commercial and ultra-high purity metals and compounds for the pharmaceutical, electronic, industrial and solar markets. 5N Plus is the leading supplier of bismuth and a leading supplier of gallium, germanium tellurium and indium. The company on Tuesday reported its second quarter results for the period ended June 30, 2020, with management speaking of the challenges posed by COVID-19, including slower demand from the automotive, aircraft, coating and pigment sectors and a slowdown in the company\u2019s growth initiatives due to customer's program delays and site closures. On the company\u2019s state of affairs, president and CEO Arjang Roshan said in a press release, \u201cThe demand for our core products remain strong and we are experiencing tangible support from potential customers and stakeholders to commercialize our new and value-added products.\u00a0 While the former continues to strengthen the Company's balance sheet, providing adequate resources for the growth projects, the latter provides credence to the trajectory of 5N Plus with emphasis on more value-added products and services.\u201d For the second half of 2020, Roshan said 5N Plus will reach a number of milestones, including, \u201cestablishment of additional joint and strategic agreements related to growth initiatives, completion of key investment projects related to automation and process technology and completion of qualification campaigns for a number of our products.\u201d Q2 sales came in at $41.1 million while Agostino was calling for $47.0 million and the second quarter 2019 was $50.3 million. Adjusted EBITDA was a beat at $7.6 million versus Agostino\u2019s $6.2 million and last year\u2019s $5.9 million. (All figures in US dollars except where noted otherwise.) Agostino found impressive the quarter\u2019s gross margin of 30.6 per cent (versus his 24.7 per cent estimate), which he chalked up to increased value-add product sales, productivity gains and a low but stable pricing environment for metals. \u201cDespite management providing a cautious outlook for 2H, we are optimistic on VNP near and medium term outlook given the increasing shift to value-add products, which should drive higher margins and EBITDA growth (VNP guiding to 2020 EBITDA of $25-28 million versus our prior $25.8 million estimate). Longer term, we would like to see the company augment this with a focus on sales growth, for which VNP is currently looking at strategic partnerships specifically in powders and semiconductors to drive growth and increase its total addressable market,\u201d Agostino wrote. Looking ahead, Agostino pointed to still-present headwinds related to COVID-19, with VNP not yet seeing a full return on the Industrial and Catalytic markets, medical imaging softness and with some of the gold mines the company is connected with being yet to reopen. Agostino\u2019s new forecast calls for 2020 revenue of $171.3 million (previously $192.6 million) and adjusted EBITDA of $27.5 million (previously $25.9 million).