DRDGOLD Ltd (NYSE: DRD) is in focus a day after reporting a 4.0% sequential increase in gold production for its fiscal third quarter.
DRDGOLD stock should be worth $15
Reacting to its earnings print, an H.C. Wainwright analyst reiterated his “buy” rating on the South African company.
Heiko Ihle sees upside in DRDGOLD stock to $15 that suggests another 10% upside from here. His research note reads:
Our valuation for the firm is presently based on a gold price of $1,750/oz, which compares to a spot price of $2,028/oz as of May 8th, and, therefore, appears overly conservative.
More importantly, the gold producer reported $26.24 million in adjusted EBITDA for its Q3 – up a whopping 54% versus the previous quarter. DRDGOLD shares are already up more than 75% for the year at writing.
Why else is he bullish on DRDGOLD shares
DRDGOLD remains committed to producing 160,000 oz to 180,000 oz of gold in its current financial year at a cash operating cost of about $1,161/oz, as per the press release. Heiko Ihle also said in his research note:
DRD continued to advance the completion of its solar power plant at Ergo during the quarter. It expects to begin the commissioning process of Driefontein 3 at the FWGR for mining.
The mining and exploration company currently pays a dividend yield of 2.42% that makes up for another reason to own DRDGOLD stock.
The H.C. Wainwright analyst also likes this gold stock because the company is free of debt as of March 31st, 2023.
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