Royal Gold’s Solid Cash Flow Potential Balanced by Modest Growth Prospects: Hold Rating

Royal Gold (RGLD) has received a new Hold rating, initiated by BMO Capital analyst, Matt Murphy.

Matt Murphy has given his Hold rating due to a combination of factors that highlight both strengths and limitations in Royal Gold’s current position. The company is recognized for its solid free cash flow potential, attributed to the ramp-up of key assets like Pueblo Viejo, Goldrush, and Khoemacau, and its relatively lower financing obligations compared to peers. This positions Royal Gold well for short-term financial performance, with free cash flow margins expected to surpass those of its competitors over the next five years.
However, Murphy notes that Royal Gold’s forward-looking growth is less robust than its peers, despite recent successes in expanding its streaming and royalty portfolio. While the company is projected to grow production per share by 15% in the coming years, this growth rate is considered modest relative to the industry. Consequently, the current share price is viewed as fairly valued, leading to the Hold rating as Murphy awaits further updates and performance improvements in Royal Gold’s portfolio.