Mid-Cap

One Gold Stock Can Face Resistance at the Current Levels - PRU

December 01, 2023 | Team Kalkine
One Gold Stock Can Face Resistance at the Current Levels - PRU

PRU:ASX
Investment Type
Mid - Cap
Risk Level
Action
Rec. Price (AU$)

This report is an updated version of the report published on 1 December 2023 at 4:54 PM AEDT.

Perseus Mining Ltd (ASX: PRU) – SELL at AUD 1.945

Perseus Mining Ltd is involved in the exploration, development, mining, and processing of gold deposits.

Recommendation Rationale – SELL at AUD 1.945

  • Profit Booking: PRU’s stock price has breached the ‘Resistance 1’ level given in the report on 28 November 2023, and presented a profit booking opportunity.
  • Technical Indicator: The momentum oscillator 14-Day RSI (~68.20) is approaching the overbought zone; and thus, price can face correction in the short term.
  • Overvalued Multiples: On a 12–month forward basis – key trading multiples (Price/Earnings, and Price/Cash Flow) are higher than the median of the Basic Materials sector.
  • Financials: During FY23, PRU’s revenue and profit after tax had increased by 27% and 70% YoY, respectively.

PRU’s Daily Chart

 (Source: REFINITIV, Analysis by Kalkine Group)

Valuation Methodology: Price/Earnings Approach (FY24E) (Illustrative)

Considering that the resistance level, and risks associated, it is prudent to book profit at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current price of AUD 1.945 (as of 1 December 2023, at 3:59 PM AEDT).

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

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 1 December 2023. 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: Dividend Yield may vary as per the stock price movement. 



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