Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Eldorado Gold Corporation (NYSE: EGO) is a gold and base metals mining, development, and exploration company. It has mining operations, ongoing development projects and exploration in Turkiye, Canada, and Greece. It operates four mines: Kisladag and Efemcukuru located in western Turkiye, the Lamaque Complex in Quebec, Canada, and Olympias, located in northern Greece.

Kalkine’s Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has given a return of 23.87% in the last three months, while a return of 2.4% in past six months.
• The stock is in its higher band of its 52-week range of USD 19.06 and 52-week low price of USD 9.72. Post the announcement of Q3FY24 results the stock has corrected by approx. 12.48% correction, with the current price taking support from an important support level of USD 14- USD 14.50.
• The price is currently trading below both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 33.07, nearing oversold zone.   

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~52.48% of the total shareholding, signifying concentrated shareholding. BlackRock Investment Management (UK) Ltd., and Helikon Investments Ltd are the biggest shareholders, holding the maximum stake in the company at 12.85% and 9.21%, respectively.

1.4 Key Metrics

In Q3FY24, EGO reported significant improvements across key profitability and return metrics compared to Q3FY23. The gross profit margin increased from 27.1% to 38.1%, driven by higher gold prices and increased sales volumes, which positively impacted revenue. EBITDA and operating margins also saw substantial increases, rising to 50.5% and 30.9% respectively. This margin expansion reflects both higher production efficiency and a favorable cost structure, despite increased production costs due to higher royalties and labor expenses. The income before tax margin nearly doubled, reaching 39.0%, indicating robust profitability before tax obligations.

Net margin improved markedly, shifting from a negative -2.7% in Q3FY23 to a positive 30.5% in Q3FY24, demonstrating a strong turnaround in bottom-line performance. Additionally, EGO's return on average common equity and return on average total assets rose to 7.9% and 5.5%, respectively, as a result of higher net earnings and more effective asset utilization. Although free cash flow yield remained negative at -0.7%, it showed a notable improvement from -3.7% in Q3FY23, supported by increased operating cash flows. Overall, these metrics underscore EGO's enhanced operational efficiency and strategic financial management, contributing to a more favorable financial position and improved shareholder returns.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q3FY24:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has given a return of 23.87% in the last three months, while a return of 2.4% in past six months.
• The stock is in its higher band of its 52-week range of USD 19.06 and 52-week low price of USD 9.72. Post the announcement of Q3FY24 results the stock has corrected by approx. 12.48% correction, with the current price taking support from an important support level of USD 14- USD 14.50.
• The price is currently trading below both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 33.07, nearing oversold zone.  

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation     

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is November 14, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.