Bill Gross warns on gold momentum as regional bank stocks tumble
Investing.com - RBC Capital downgraded Ramelius Resources (ASX:RMS) (OTC:RMLRF) from Sector Perform to Underperform while raising its price target to AUD2.80 from AUD2.70. The stock, which has delivered an impressive 112.3% return year-to-date and trades near its 52-week high, currently shows signs of being overvalued according to InvestingPro Fair Value analysis.
The downgrade comes as RBC Capital analyst Alexander Barkley cited concerns about falling production that has stretched near-term valuation for the gold mining company, despite its strong financial metrics including a P/E ratio of 9.49 and robust revenue growth of 36.35% over the last twelve months. InvestingPro data reveals 12 additional key insights about the company’s performance and outlook.
The firm believes market consensus could be overestimating early production at the Dalgaranga project and overall group production, particularly in fiscal years 2027 and 2028, where RBC estimates significantly lower output than consensus forecasts.
Despite acknowledging the strategic merit of Ramelius’s Spartan acquisition, RBC Capital warned that market expectations for "strong concurrent delivery of multiple projects" could create downside risk potential for the stock.
The new price target of AUD2.80 suggests approximately 30% downside potential, with RBC Capital indicating it prefers alternative gold exposure in the sector.
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