SBSW - Sibanye Stillwater: Bet On Growing PGM Deficit (Rating Upgrade)
2024-04-10 22:39:26 ET
Summary
- The PGM market is showing signs of improvement. Major automakers announced their intentions to keep ICE production for the foreseeable future.
- SBSW 2023 results are promising, considering the PGM bear market. The company took successful cost-cut measures, resulting in $375 million savings.
- SBSW maintains its balance sheet with ample liquidity and a prudent capital structure. The company holds $1,397 billion in cash and owes $1,363 in long-term debt.
- With higher gold and PGM production figures in FY24 and stronger spot prices, SBSW's profitability will recover.
- PGM miners are cheap, but SBSW is dirt cheap. I give SBSW a Buy rating.
Note: I previously covered Sibanye Stillwater ( SBSW ) in November 2023. I discussed PGM's declining supply and rising demand. SBSW is an excellent way to bet on that. I dissected company operations: platinum mining in South Africa, its US recycling business, and DRD Gold ownership. Despite the weak PGM market, SBSW keeps a strong balance sheet with ample liquidity. At that time, I concluded it was too early to buy; I gave SBSW a Hold rating.
Over the past few months, I have diligently monitored the PGM market, and I am now confident that the time is ripe. In today’s article, I will review SBSW's latest results and the platinum market and subsequently update the company’s valuation and rating....
Sibanye Stillwater: Bet On Growing PGM Deficit (Rating Upgrade)