RBC Capital adjusted its outlook on Westgold Resources Ltd (WGX: AU), reducing the company's price target from AUD3.30 to AUD3.20, while maintaining an Outperform rating on the stock.
The revision follows Westgold's mixed financial year 2025 (FY25) guidance, which indicated a slight underperformance in production forecasts but better than expected All-In Sustaining Costs (AISC).
The firm's analyst cited the recent Reserve and Resource update as a positive development, noting that it demonstrated successful conversion that offset the depletion from mining activities.
Furthermore, the potential at near mine targets, specifically the Fletcher site, was highlighted for its ability to possibly extend the mine's lifespan or increase operational rates.
The decrease in the price target to AUD3.20 per share was attributed to the anticipated lower gold production and increased capital expenditure.
Despite the adjustment, RBC Capital remains optimistic about Westgold Resources, emphasizing the company's operational flexibility, expected near-term production and earnings growth, its position with unhedged gold exposure, and the current valuation of the company based on its Enterprise Value/Earnings Before Interest, Taxes, Depreciation, and Amortization (EV/EBITDA) multiples.
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