BMO Capital analyst Raj Ray maintained a Hold rating on Harmony Gold Mining yesterday and set a price target of $20.00.
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Raj Ray has given his Hold rating due to a combination of factors related to Harmony Gold Mining’s strategic shift towards copper. The company’s recent acquisition of the Eva Copper and CSA copper operations in Australia is expected to enhance its growth prospects and reduce geographical and operational risks. However, the substantial capital investment required in the near term and the modest initial economic returns suggest that any significant re-rating of the stock will be gradual and contingent upon successful project execution.
While Harmony is poised to increase its copper revenue share to over 20% by 2030, improving its overall portfolio quality, the high development costs and low initial returns from the Eva project pose challenges. Additionally, the CSA operation, though already in production, requires further visibility on ramp-up progress and potential valuation gains to justify the acquisition costs. Despite a strong balance sheet and operational consistency, the focus on growth funding may limit immediate value uplift, warranting a cautious approach until more clarity on copper asset performance and capital allocation emerges.
According to TipRanks, Ray is a 5-star analyst with an average return of 32.7% and a 72.08% success rate. Ray covers the Basic Materials sector, focusing on stocks such as MP Materials, Standard Lithium Ltd, and Centerra Gold.