Harmen Puri, an analyst from Bank of America Securities, reiterated the Hold rating on Alamos Gold (AGI – Research Report). The associated price target is $15.75.
Harmen Puri has given his Hold rating due to a combination of factors impacting Alamos Gold’s near-term and longer-term financial outlook. On one hand, Alamos Gold finished 2023 strongly, meeting the upper end of its production guidance. However, Puri points out that the company’s projections for 2024-2025 are somewhat disappointing, particularly regarding increased costs and capital expenditures, which are higher than previous estimates, although they are within the expected range set by Bank of America Securities. This suggests a period of compressed profitability in the medium term, necessitating a cautious investment stance.
Looking ahead to 2026, Puri’s outlook for Alamos Gold becomes more favorable, with a significant increase in production and a reduction in costs anticipated. The preliminary guidance for 2026 reflects better efficiency and productivity from the Island P3+ project. Despite these positive projections, the current valuation of Alamos Gold’s stock appears rich compared to its peers. This valuation, along with the mixed short-term outlook, justifies the Hold rating as it acknowledges the potential for future growth while recognizing near-term financial pressures and market positioning.
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Alamos Gold (AGI) Company Description:
Alamos Gold, Inc. engages in the exploration, development, mining, and extraction of precious metals. It operates through the following segments: Young-Davidson, Mulatos, Island Gold, Elchanate, Kirazli, and Corporate and Other. The company was founded on February 21, 2003 and is headquartered in Toronto, Canada.
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