- Royal Gold (RGLD +1.1%) is among a minority of gold stocks rising today after RBC upgrades shares to Outperform from Sector Perform with a $150 price target, as it expects the miner will generate leading free cash flow among precious metals royalty companies that is competitive and can be sustained in a lower gold price environment.
- Royal Gold's business maintains ~80% EBITDA margins and ~90% FCF conversion, providing for exceptionally high cash generation, RBC says, calculating the company can generate a 5.4% FCF/EV ratio at $1,500/oz. gold prices in 2021, better than peers and the broader market.
- Based on Royal Gold's industry-leading margins and improved valuation, the stock's pullback below $115.00 offers a low-risk entry point for a starter position, Taylor Dart writes in a bullish analysis posted on Seeking Alpha.