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On Thursday, Raymond (NSE:RYMD) James confirmed its Outperform rating on Gold Royalty Corp. (NYSE:GROY) with a steady price target of $2.75, representing significant upside from the current price of $1.37. The firm’s analyst, Brian MacArthur, highlighted the advantages of investing in royalty companies like Gold Royalty, noting their potential to offer investors exposure to precious metal prices while also providing a buffer against operating and capital cost risks. According to InvestingPro data, the stock has shown strong momentum with a 26.45% YTD return, though it currently trades below its Fair Value.
Gold Royalty Corp.’s portfolio, which comprises over 200 royalties, is mainly focused on precious metals. These assets are situated in regions with low jurisdictional risk, which is a positive factor for the company. The analyst pointed out that the company’s portfolio not only presents a lower risk profile but also holds the promise of growth through exploration potential. InvestingPro analysis reveals several key insights about the company’s growth trajectory, with analysts expecting sales growth this year and projecting profitability. For deeper insights into GROY’s growth potential and risk factors, InvestingPro subscribers can access 6 additional ProTips and comprehensive financial metrics.
The firm emphasized Gold Royalty’s strong financial position, mentioning its flexible balance sheet. This financial flexibility is reflected in the company’s healthy current ratio of 1.63 and relatively low debt-to-equity ratio of 0.09. InvestingPro’s Financial Health Score rates the company as "GOOD," though it’s worth noting the company is currently burning through cash, with negative free cash flow in the last twelve months.
The Outperform rating by Raymond James suggests that the firm expects Gold Royalty’s stock performance to exceed the average return of the stocks that Raymond James covers over the next six to twelve months. The $2.75 price target indicates the level at which the analyst believes the stock will trade at within that same time horizon.
Investors often look to analyst ratings and price targets to gauge market sentiment about a stock’s future performance. Raymond James’ reiteration of the Outperform rating and price target for Gold Royalty Corp. reflects confidence in the company’s business model and its ability to leverage its portfolio of royalties in the precious metals sector.
In other recent news, Gold Royalty Corp announced its financial results for the fourth quarter of 2024, which missed analyst expectations, leading to a wider-than-expected loss. The company reported an earnings per share loss of $0.02, surpassing the anticipated loss of $0.0063, while revenue fell short at $3.36 million compared to the expected $4.99 million. Despite these setbacks, the company achieved a 146% year-over-year increase in total revenue, reaching $12.8 million for the full year 2024. Additionally, Gold Royalty Corp achieved positive operating cash flows for the first time, amounting to $2.5 million. The company anticipates future growth driven by key projects like the Cote Gold mine and the Borborema project, with expectations of reaching a steady-state production rate at Cote Gold by the end of 2025. Analysts from H.C. Wainwright participated in the earnings call, highlighting the company’s conservative guidance approach and its debt strategy. The company remains focused on cash flow and disciplined capital allocation to ensure continued growth and financial stability.
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