DRDGOLD (DRD) Stock Forecast & Price Target

DRDGold Ltd has reported a slight increase in gold sales to 37,231 ounces, alongside a robust average gold price of $3,429 per ounce, contributing to an adjusted EBITDA growth to approximately R1,092.9 million (~$62.0 million). The company's Vision 2028 growth strategy indicates a commitment to expanding gold operations with an expected capital expenditure of R7.8 billion (~$449.7 million), indicating a proactive approach to scaling up production. Furthermore, the favorable gold price environment has not only bolstered liquidity and free cash flow but has also enabled DRD to increase its dividend, reflecting strong financial health amidst substantial capital expenditures.

DRDGold's financial outlook remains negative primarily due to escalating operational costs, which include increased labor expenses, elevated electricity costs stemming from winter tariffs, and additional machine hire expenses for site cleanup. The company reported a 9% quarter-over-quarter rise in all-in costs, amounting to R781 million ($44.3 million), which translates to all-in costs of R1,745,213/kg or $3,079/oz, reflecting a 6% year-over-year increase. Despite the ongoing strength in gold prices, the rising costs could significantly impact profitability, raising concerns about the company's financial performance moving forward.