If you are looking for exposure to the gold sector, then Capricorn Metals Ltd (ASX: CMM) shares could be the way to do it.
That's the view of analysts at Bell Potter, who believe the ASX 200 gold share would be a top option right now.
Why is Capricorn Metals an ASX 200 gold share to buy?
Bell Potter highlights that Capricorn Metals recently released its FY 2023 results and revealed a performance in line with its expectations. It said:
CMM announced its FY23 financial result, reporting total revenue of $321m (BPe $321m), EBITDA of $162m (BPe $135m), underlying NPAT of $86m (BPe $89m) and reported NPAT of $4.4m for EPS of 1.2c.
Importantly, it notes that its sector-leading metrics were maintained during the year. The broker explains:
EBITDA beat our forecast on lower cost of sales and lower costs expensed at the Mt Gibson development project. The result showed a solid 50.5% EBITDA margin, which looks to be among the top three for gold producers in the sector.
Plenty of upside
In light of the above, the broker has retained its buy rating on the ASX 200 gold share with a slightly improved price target of $5.20. This implies a potential upside of 23% for investors over the next 12 months. The broker commented:
There are no material EPS changes in this report. Our NPV-based valuation is effectively unchanged at $5.20/sh. We retain our Buy recommendation. CMM is a sector leading gold producer with a strong balance sheet and a management team with an excellent track record of operational delivery. Its costs are among the lowest in the sector and it consistently generates strong cash margins.
All in all, Bell Potter appears to see Capricorn Metals as a great option right now if you're wanting to invest in this side of the market.
