Street Calls of the Week
Investing.com - HSBC has upgraded Harmony Gold (NYSE:HMY) from Hold to Buy and raised its price target to $365.00 from $260.00, citing potential upside after recent underperformance. The gold miner has demonstrated remarkable momentum, delivering a 130% year-to-date return and maintaining excellent financial health with an InvestingPro Overall Score of 4.01.
The South African gold miner’s shares have lagged behind peers since announcing its acquisition of MAC Copper, according to HSBC’s analysis. While HSBC considers the acquisition pricing fair, it questions the strategic rationale for Harmony’s diversification into copper and the Australian market.
HSBC believes the market reaction to the acquisition news may be excessive, leading to the upgraded rating. The firm now prefers Harmony among the three South African gold miners it covers.
The investment bank points to anticipated capital upside and potential for a leading double-digit dividend yield over the next 12 months as key factors supporting the upgrade decision.
HSBC identified a key downside risk to its positive outlook: the possibility that Harmony might use its cash flow to buy out its gold hedges rather than returning value to shareholders.
In other recent news, BMO Capital has initiated coverage on Harmony Gold with a Market Perform rating. The firm has set a price target of $16.00 per American Depositary Receipt (ADR). Harmony Gold, a South African senior gold producer, has been recognized by BMO Capital as one of the best performers in the gold sector in recent years. These developments reflect BMO Capital’s outlook on the company’s current market position. The Market Perform rating suggests that BMO Capital expects Harmony Gold’s stock to perform in line with the broader market. This recent analysis provides investors with insights into the company’s standing within the gold industry.
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