On Friday, H.C. Wainwright maintained a positive outlook on DRDGOLD Ltd. (NYSE:DRD) shares, reiterating a Buy rating and a price target of $13.25. The firm's endorsement follows DRDGOLD's announcement of its first-quarter results for fiscal year 2025, which showed a quarter-over-quarter increase in gold production and sales.
DRDGOLD reported a production of 42,407 ounces of gold for the quarter, translating to 1,319 kilograms, marking a 7% rise from the previous quarter. Gold sales also experienced growth, with a 4% increase quarter-over-quarter, amounting to 41,442 ounces or 1,289 kilograms. The company's production boost is attributed to a 13% growth in throughput, despite a 6% year-over-year decline in gold grades to 0.201 grams per tonne.
The company's financial performance reflected the increased production levels, with adjusted EBITDA climbing by 17% from the previous quarter to approximately R680.8 million, equivalent to around $37.9 million. This improvement was partly due to a roughly 6% increase in the average realized gold price during the quarter.
H.C. Wainwright's analyst highlighted DRDGOLD's consistent performance and expressed confidence in the company's ability to meet its annual production guidance. DRDGOLD's management has set a target for the fiscal year 2025, aiming to produce between 155,000 and 165,000 ounces of gold. The analyst's reiterated Buy rating and price target of $13.25 reflect the firm's optimism about DRDGOLD's trajectory and its capacity to achieve its stated goals.
In other recent news, DRDGOLD Ltd. has seen its share target reduced by H.C. Wainwright, although the firm retains a Buy rating on the stock. This adjustment comes on the heels of DRDGOLD's fiscal year 2024 financial results announcement.
The company reported a 14% year-over-year revenue increase, with figures climbing from approximately $307.6 million in FY2023 to around $349.2 million in FY2024. This growth was primarily driven by a 20% rise in the average Rand gold price received, despite a 5% decline in total gold sold.
Net income also showed an increase, reaching about $74.3 million or $0.086 per share, up from the previous year's $71.7 million or $0.083 per share. Significant capital expenditures were noted, with the company investing approximately $167.5 million during FY2024, a significant increase from the $64.2 million spent in FY2023.
InvestingPro Insights
DRDGOLD's recent performance aligns with several key metrics and insights from InvestingPro. The company's strong quarterly results are reflected in its revenue growth, with InvestingPro data showing a 14.9% increase in quarterly revenue. This growth supports H.C. Wainwright's positive outlook and reaffirms DRDGOLD's ability to capitalize on favorable market conditions.
InvestingPro Tips highlight that DRDGOLD is trading near its 52-week high and has shown significant returns over various time frames, including a 26.47% return over the last month. These metrics underscore the market's positive sentiment towards the company, which is consistent with the analyst's Buy rating.
Moreover, DRDGOLD's financial health appears robust, with InvestingPro data indicating that the company holds more cash than debt on its balance sheet and has liquid assets exceeding short-term obligations. This strong financial position supports the company's ability to pursue its production targets and maintain its 17-year streak of dividend payments, as noted in another InvestingPro Tip.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips on DRDGOLD, providing a deeper understanding of the company's financial position and market performance.
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