In a report released today, Matt Murphy from BMO Capital upgraded Royal Gold to a Buy, with a price target of $240.00.
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Matt Murphy has given his Buy rating due to a combination of factors including the recent acquisitions of Sandstorm and Horizon, which are expected to enhance Royal Gold’s growth, diversification, and portfolio duration. These acquisitions are seen as accretive to the company’s net asset value (NAV) and medium-term earnings per share (EPS), with significant benefits anticipated from new streams and expansions at key assets like Kansanshi, Fourmile, and Mount Milligan.
Furthermore, the pro forma portfolio is projected to achieve a higher compound annual growth rate in gold equivalent ounces (GEO) sales, and the concentration risk in the portfolio has been reduced. The company’s revenue is expected to remain heavily weighted towards precious metals, which is favorable given the recent increase in gold price forecasts. The target price for Royal Gold has been increased to $240, reflecting the company’s attractive valuation and potential for further portfolio derisking following the integration of the newly acquired assets.
According to TipRanks, Murphy is a top 100 analyst with an average return of 32.5% and a 74.69% success rate. Murphy covers the Basic Materials sector, focusing on stocks such as Barrick Mining, First Quantum Minerals, and Franco-Nevada.