Sell Rating on Royal Gold Due to Risky Acquisitions and Unfavorable Valuation Timing

Lawson Winder, an analyst from Bank of America Securities, maintained the Sell rating on Royal Gold. The associated price target is $185.00.

Lawson Winder has given his Sell rating due to a combination of factors surrounding Royal Gold’s recent acquisitions. The company announced the purchase of Sandstorm Gold and Horizon Copper, which, while increasing asset diversification, also introduce higher risk. The acquired portfolios are heavily weighted towards development assets, which carry execution and valuation risks, particularly in jurisdictions like Türkiye and South Africa that are considered higher risk compared to North America.
Furthermore, the timing of these acquisitions is not ideal from a valuation perspective, as Sandstorm’s share price has significantly outperformed Royal Gold’s year-to-date. While there is potential for long-term value creation, the short to medium-term outlook appears neutral to negative. This, coupled with the broader trend of increased M&A activity in the gold sector, which adds downside risk for larger companies, underpins the Sell rating.