In a report released yesterday, Raj Ray from BMO Capital upgraded Gold Fields (GFI – Research Report) to a Hold, with a price target of $14.00.

Raj Ray has given his Hold rating due to a combination of factors related to Gold Fields’ recent performance and market valuation. The adjustment of the target price to US$14.00/ADR reflects updated gold price forecasts, while the change from an Underperform to Market Perform rating is attributed to the stock’s valuation aligning more closely with that of its peers. Ray acknowledges the operational hiccups Gold Fields has encountered, especially the delays and difficulties in ramping up the Salares Norte project, leading to a revision of their guidance and contributing to the underperformance of the company’s shares relative to the GDX index. Despite these challenges, there is a belief that the market now possesses clearer insight into the potential operational risks faced by Gold Fields.

Furthermore, the report emphasizes the importance of operational consistency for a potential positive re-rating of Gold Fields in the future. Although the company has faced operational volatility over the last 12 to 18 months, its track record since 2020 has been largely commendable. The relatively new senior management team is expected to take steps to improve productivity and ensure steady progress, particularly with the Salares Norte project. A stronger production profile is anticipated for the second half of 2024, despite the expectation of continued operational volatility during the optimization process. Additionally, Gold Fields maintains a robust balance sheet and liquidity position, with a manageable net debt to EBITDA ratio and access to a sizable revolving credit facility.

In another report released on June 14, Scotiabank also maintained a Hold rating on the stock with a $17.00 price target.

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Gold Fields (GFI) Company Description:

Gold Fields Ltd. is a gold mining company, which engages in the production of gold and operation of mines. Its operating mines are located in Australia, Ghana, Peru, and South Africa. The company was founded on May 03, 1968 and is headquartered in Johannesburg, South Africa.