Last Updated: 19 Sep 2024
Executive Summary
Royal Gold Inc. (RGLD) is a leading precious metals royalty company with a market capitalization of $9.15 billion. The company's strong financial performance, including an EBITDA of $517.4 million and EPS of $3.65, has resulted in a trailing PE ratio of 38.12. Analysts have a positive outlook on RGLD, with six Buy ratings and five Hold ratings. The stock's current price of $139.14 is below the analyst target price of $158.73, presenting a potential buying opportunity.
Company Overview
Royal Gold acquires and manages precious metal flows, royalties, and related interests. Headquartered in Denver, Colorado, the company has a portfolio of over 190 assets in various stages of development and production. RGLD's primary focus is on gold and silver, with a particular emphasis on royalties from operating mines.
Fundamental Analysis
Revenue and Earnings: RGLD's revenue has grown steadily in recent years, reaching $645.2 million in the trailing twelve months. The company's gross profit margin is 77.8%, and its operating margin is 50.5%.
Profitability: RGLD has a strong track record of profitability, with an EBITDA margin of 42.5%. The company's return on assets and return on equity are 7.44% and 11%, respectively.
Financial Health: RGLD has a solid financial position, with $1.1 billion in cash and equivalents and $1.5 billion in debt. The company's debt-to-equity ratio is 0.67.
Technical Analysis
Trend: RGLD's stock price is currently trending sideways, with a 50-day moving average of $136.54 and a 200-day moving average of $123.78.
Support and Resistance: The stock has support at the 200-day moving average and resistance at the 52-week high of $145.59.
Technical Indicators: The relative strength index (RSI) is currently at 52, indicating that the stock is neither overbought nor oversold. The moving average convergence divergence (MACD) indicator is also neutral.
Short Term Outlook
In the short term, RGLD's stock price is likely to remain range-bound between the 50-day and 200-day moving averages. The stock may face resistance at the 52-week high, but a breakout above this level could lead to a rally.
Long Term Outlook
Analysts are positive on RGLD's long-term prospects. The company's strong financial performance and portfolio of high-quality assets position it well for continued growth. The rising demand for precious metals is expected to support RGLD's revenue and earnings in the coming years.
Analyst Recommendations
Of the 12 analysts covering RGLD, six have Buy ratings, five have Hold ratings, and one has a Sell rating. The average analyst target price is $158.73, representing a potential upside of 14.1% from the current price.
Conclusion
Royal Gold Inc. is a well-established and financially sound precious metals royalty company with a strong track record of growth and profitability. The company's stock is currently trading below its analyst target price, presenting a potential buying opportunity for investors seeking exposure to the precious metals sector.
