Downgrading Sibanye Stillwater To A Hold Amid Rising Risk Premiums

Summary

• Sibanye Stillwater Limited misfortunes seem endless as additional obstacles have slowed its PGM production. Moreover, exogenous features are intensifying.
• Although we anticipate higher PGM prices and a sector-based recovery, we have decided to exclude Sibanye from the pack as its stock is in vulnerable territory.
• Value can be unlocked at Keliber with a potential IRR of 27%, and Sibanye's stake in DRDGOLD is paying dividends.
• Nevertheless, a high country risk premium, an undesirable forward book value, and continuous internal obstacles lend us various reasons to downgrade Sibanye Stillwater Limited stock.

THEGIFT777

In spite of a minor recovery among South African Platinum group metals ("PGM") stocks, Sibanye Stillwater Limited (NYSE:SBSW) fortunes have continued to erode as it has experienced additional setbacks within its U.S. PGM segment and ongoing external pressure

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SBSW either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Our long position in SBSW is not newly initiated, it is maintained to avoid unrealized losses. Our current outlook on SBSW and our trading of the stock is aligned.