If you're looking for exposure to the gold sector, then you might want to check out what Goldman Sachs is saying this week.
That's because the broker has just initiated coverage on three ASX 200 gold shares with buy ratings. Here's what Goldman is saying about these shares:
Evolution Mining Ltd (ASX: EVN)
Goldman has initiated coverage on this ASX 200 gold share with a buy rating and a $3.80 price target. It believes the gold miner has strong earnings growth potential in the near term. It said:
We prefer near-term margins/returns over long-term ounces in the Australian gold sector, and assets with less execution risk. EVN has the strongest near-term EBITDA growth in the sector, supported by copper production/pricing.
Gold Road Resources Ltd (ASX: GOR)
Another gold miner that Goldman has initiated coverage on with a buy rating is Gold Road. Its analysts have a $1.85 price target on its shares.
Goldman highlights that Gold Road's shares are trading at a discount to net asset value (NAV) based on its above-consensus gold price assumptions. It said:
GOR remains undervalued in our view, trading at ~0.9x NAV on our LT gold price of US$1,700/oz, or pricing ~US$1,560/oz gold (peer average ~1x NAV and ~US$1,700/oz), and near-term FCF yields of c. 10% in CY24/25 remain attractive vs. peers and support upside to the outlook for capital returns.
Regis Resources Ltd (ASX: RRL)
A third ASX 200 gold share that the broker rates as a buy is Regis Resources. Goldman has a buy rating and a $2.30 price target on its shares.
As well as trading at a discount to NAV, the broker highlights that no value appears to be ascribed to its McPhillamys project. It explains:
On our valuation estimates, RRL is trading broadly without value for the McPhillamys gold project. We note that despite IPC approval a Section 10 application remains on the mining site (delaying final geotechnical drilling), though RRL remains confident it will be resolved with the IPC decision in hand (and continues to provide fortnightly community updates).
