Alamos Gold Price Target Cut to $50 After 12% Production Guidance Shock
AGI•Bank of America lowered Alamos Gold’s price target to $50 from $57 after the Young-Davidson seismic incident forced a 12% second-quarter production cut, despite that mine contributing just 17% of NAV. Analysts still rate the stock Buy and highlight a 19% average P/NAV discount to gold spot prices.
1. Gold Stocks Trading at NAV Discount
BofA notes that its coverage group of gold equities is on average priced at $3,354 per ounce using P/NAV, representing a 19% discount to the current spot price of $4,156. On an EV/EBITDA basis, the implied average gold price is $4,016 per ounce, a 3% discount to spot, underscoring attractive valuations versus bullion.
2. Alamos Gold Price Target and Guidance Revision
Following seismic damage at its Young-Davidson mine, Alamos cut Q2 production guidance by 12% and BofA lowered the firm’s target from $57 to $50. Despite an 18.4% share drop, the bank retains a Buy rating, citing limited NAV impact from Young-Davidson (17%) and growth potential from Island Gold and Lynn Lake.
