H.C. Wainwright analyst Heiko Ihle reiterated a Buy rating on Drdgold (DRD – Research Report) today and set a price target of $15.50.
Heiko Ihle has given his Buy rating due to a combination of factors including DRDGold’s recent production results and the firm’s financial performance. Despite a quarter-over-quarter decrease in gold production and throughput, March’s performance indicated a positive outlook for the upcoming fiscal quarter. This is further supported by an increase in adjusted EBITDA by 12% due to a rise in the average realized gold price by approximately 5%. Ihle appears confident in the company’s positioning for future operations, anticipating more insights with the publication of DRD’s FY2024 results.
Additionally, Ihle’s optimism is reinforced by macroeconomic factors affecting the precious metals market. He notes the strength in gold and silver prices over the past year, driven by inflation, investment in safe-haven assets, and recessionary concerns. The upward revision of gold and silver price decks, while still conservative compared to current spot prices, suggests a favorable environment for DRDGold. The adjustment reflects a 10.5% increase for gold and a similar uplift for silver from previous estimates, indicating a potentially more profitable landscape for the firm’s future.
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Drdgold (DRD) Company Description:
DRDGOLD Ltd. engages in the business of retreatment of surface gold. It operates through the following segments: Ergo, FWGR, and Other Reconciling Items. The Ergo segment treats slime dams and sand dumps to the south of Johannesburg’s central business district as well as the East and Central Rand goldfields. The FWGR segment focuses on the slime dams in the West Rand goldfields. The company was founded on February 16, 1895 and is headquartered in Rosebank, South Africa.
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