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Investing.com - Citi downgraded Regis Resources Ltd . (ASX:RRL) from Neutral to Sell and lowered its price target to AUD3.80 from AUD4.10, citing higher costs and softer production outlook. According to InvestingPro data, the company maintains a GREAT financial health score and operates with moderate debt levels, with a debt-to-equity ratio of 0.25.
The gold miner pre-released its fiscal year 2025 production and cash figures, with production guidance of 350,000-380,000 ounces coming in slightly below expectations at the midpoint. All-in sustaining costs (AISC) were guided at AUD2,800 per ounce, approximately AUD100 higher than consensus estimates, though Citi noted AUD170 per ounce represents non-cash expenses. InvestingPro analysis shows strong revenue growth of nearly 30% in the last twelve months, with analysts expecting continued profitability this year.
Growth capital expenditure at the company’s Duketon operations was projected at AUD165-175 million, substantially higher than the consensus estimate of AUD90 million. Regis Resources (OTC:RGRNF) plans to mine higher-cost pits and process stockpiles this fiscal year to capitalize on elevated gold prices.
Citi reduced its net asset value estimate for Regis (NASDAQ:RGS) by 9% after incorporating the higher costs into its model. The firm’s bearish stance is also influenced by its below-consensus gold price forecast.
The stock has outperformed the VanEck Gold Miners ETF (NYSE:GDX) by approximately 20% year-to-date, with potential headwinds expected from September quarter index changes, according to Citi’s analysis.
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