In a report released yesterday, Raj Ray from BMO Capital downgraded Gold Fields (GFI – Research Report) to a Sell, with a price target of $12.00.
Raj Ray’s Sell rating on Gold Fields is influenced by a collection of concerns surrounding the company’s operations and outlook. Notably, operational risks projected for the year 2024 are not reflected in the company’s current stock valuation. Gold Fields has been trading at a premium, which Ray believes is unwarranted given the expected operational challenges. These include setbacks in key areas of production, such as in Australia, which is a significant contributor to the company’s output, and South Africa, along with leadership instability that may affect strategic continuity and execution.
Additionally, Ray perceives potential disappointment in the company’s forthcoming financial results and 2024 projections, due to be reported in February 2024. The Australian operations, representing almost half of Gold Fields’ production, have shown signs of potential underperformance that could negatively impact market expectations. Moreover, the delayed Salares Norte project in Chile is also contributing to the bearish outlook, with its production guidance significantly reduced, which in turn would temper the anticipated free cash flow boost. Based on these factors, Ray has adjusted his earnings and cash flow per share estimates downward for Gold Fields, further justifying the Sell recommendation.
GFI’s price has also changed moderately for the past six months – from $13.610 to $15.810, which is a 16.16% increase.
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Gold Fields (GFI) Company Description:
Gold Fields Ltd. is a gold mining company, which engages in the production of gold and operation of mines. Its operating mines are located in Australia, Ghana, Peru, and South Africa. The company was founded on May 03, 1968 and is headquartered in Johannesburg, South Africa.
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