On Friday, Jefferies updated its outlook on Gold Road Resources Limited (GOR:AU) (OTC: ELKMF), raising the stock price target to AUD2.20 from the previous AUD2.15. The firm continues to recommend a Buy rating on the stock. The adjustment reflects Jefferies' analysis of the company's performance amid ongoing logistics challenges.
Gold Road Resources has been grappling with logistics constraints due to inclement weather, which has led to the company's 2024 guidance being adjusted to the lower end of expectations. Jefferies now anticipates that the company's actual performance may fall below the provided guidance. Nevertheless, the firm acknowledges the potential impact of production downgrades on the stock.
Despite these challenges, the share price seems to account for the company's confirmed plans for inorganic growth. Jefferies believes that this strategic direction is undervalued in the current stock price, suggesting a significant discount to the long-term value of Gold Road Resources.
The firm reiterated its Buy rating, emphasizing the company's potential and the perceived discrepancy between the current share price and the intrinsic value considering the growth ambitions. Jefferies' stance remains positive on the stock's prospects, with the new stock price target representing a slight increase from the previous valuation.
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