DRDGOLD: Why I'm Sticking With My Bullish Outlook

Summary

• DRDGOLD Limited's stock has delivered mixed returns amid a volatile operating environment. However, numerous inflection points have emerged.
• Despite experiencing lower production yields, DRDGOLD's full-year results were telling. The company's revenue grew by 14% to approximately $356 million, and its operating income increased in tandem.
• I hold a bullish view on Gold prices amid U.S. dollar weakness and economic tail risk.
• Yield normalization and Driefontein 2's expansion might add overlooked value.
• DRDGOLD's valuation metrics are mixed; while its P/B ratio is high, its EV/EBIT and P/E ratios are below five-year averages, indicating potential value.

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This article examines DRDGOLD Limited (NYSE:DRD) as I revise our outlook on the South African surface miner.

We last covered DRDGOLD's stock in August 2023, outlining its momentum and diversification advantages. Since our latest coverage, the asset drifted

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

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