CGAU - Royal Gold cut to Sell equivalent at BofA on portfolio concerns

2023-06-05 14:52:54 ET

Royal Gold ( NASDAQ: RGLD ) -1.1% in Monday's trading as Bank of America downgraded the stock to Underperform from Neutral with a $130 price target, trimmed from $149, citing heightened operational and execution concerns around key assets in the streaming company's portfolio.

Particularly noting Centerra Gold's ( CGAU ) Mount Milligan mine, where FY 2023 production guidance recently was tempered, as well as a one-quarter delay in the ramp-up of the Pueblo Viejo mine, BofA's Lawson Wilder reduced Royal Gold's ( RGLD ) estimated 2023 gold equivalent ounce sales forecast by 1% and net asset value by 6% to $57.60/share.

Wilder said he expects gold price consolidation in the coming months before rising in Q4, as the BofA commodities team calls for the gold price to average $2,200/oz., as royalty and streaming companies like Royal Gold ( RGLD ) tend to offer less leverage to changes to the gold price given their low cost bases.

More on Royal Gold:

• Financial and valuation comparison to sector peers
• Analysis: Royal Gold: A Solid Start To 2023
• Stock price return: Up 4.5% YTD, up 6% in the past 12 months

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