Gold Road Resources Limited (ASX: GOR)
Gold Road Resources Limited is an ASX index listed gold exploration entity.
Investment Rationale – SELL at AUD 1.90
- Profit Booking: GOR’s stock price breached the R1 level suggested in the previous report published on 28 March 2023 and trading close to the R2 level. Therefore, it is presenting a profit booking opportunity.
- Overvalued Multiples: On a 12-month basis, key trading multiples (EV/EBITDA, Price/Earnings, Price/Book, and Price/Cash Flow) are higher than the median of the Basic Materials sector.
- Technical Indicator: GOR’s stock price is hovering around its 52-week high while the momentum oscillator 14-day RSI (~62.15) is trading around the overbought zone; and thus, price can face correction in the short-term.
- Macroeconomic Risks: GOR’s stock price is susceptible to the uncertainties around the interest rate hike and its subsequent impact over the gold prices. Moreover, global recession and subdued consumer disposable income can affect demand prospects.
Share Price Chart
(Source: Refinitiv, Analysis done by Kalkine Group)
Valuation Methodology: Price/Earnings Approach (FY23E) (Illustrative)
Conclusion
Based on the notional gains, macroeconomic challenges, coupled with the unfavorable valuation conducted above, a "SELL" recommendation on Gold Road Resources Limited has been given at the current market price of AUD 1.90 (as of 27 April 2023, at 2:15 PM GMT+10).
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 level is 27 April 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: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/ or technical analysis taking into consideration both short-term and long-term scenarios.
Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the Australian Securities Exchange (ASX) and or REFINITIV. Typically, both sources (ASX and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’
Note 6: Dividend Yield may vary as per the stock price movement.
Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.
Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.
There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.
You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.
The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.
Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.
Please also read our Terms & Conditions and Financial Services Guide for further information.
Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this report or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.