ASX materials stocks have largely outperformed the broader market in 2026.
At the time of writing, the S&P/ASX 200 Materials Index (ASX: XMJ) is up almost 10% this year compared to a flat return for the ASX 200.
This hasn't translated to success for ASX materials stock Catalyst Metals Ltd (ASX: CYL).
The company is a mid-tier Australian gold producer and developer with 100% ownership of two key projects:
- Plutonic Gold Operation (PGO) – an operating asset in Western Australia
- Bendigo Gold Project (BGP) – an advanced exploration project in Victoria
This ASX materials stock has tumbled 23% year to date.
This included a 6% crash yesterday.
However, the team at Bell Potter is optimistic of a turnaround following the company's Quarterly Activities Report.
Image source: Getty Images
What did Catalyst Metals report?
Yesterday, Catalyst Metals reported for the March quarter:
- Plutonic gold production of 26,127oz for the quarter
- Discovery of a high-grade zone beneath existing Cinnamon Resource presents the opportunity for a sixth ore source at the Plutonic Gold Belt
- Acquisition of significant land package in the Bryah Basin – a neighbouring gold & base metal belt to Plutonic – creating an almost contiguous 190km tenement package surrounding the central processing facility at Plutonic
- Operating cash flow (after sustaining capital and corporate costs) was A$103m
- Cash and bullion at quarter end was A$277m, an increase of A$39m on the prior quarter, while reinvesting heavily in the Plutonic Gold Belt
Investors seemed displeased with the results, as the ASX mining stock slumped significantly during Wednesday's trade.
What did Bell Potter have to say?
Following the results, the team at Bell Potter released updated guidance on this ASX materials stock.
The broker said revenue was A$167.7m, which was a miss on its estimate of A$188m and consensus of $201.3m.
According to Bell Potter, costs were the main issue, with higher-than-expected cash costs (A$2,485/oz) and AISC (A$2,853/oz). These were driven by downtime, lower volumes, and inflationary pressures, though the company still generated A$103m in operating cash flow and ended with A$277m cash and no debt.
Operations are transitioning with heavy growth investment and upcoming improvements (including crusher upgrades and new mines).
While production guidance remains unchanged, full-year cost guidance has been significantly increased.
Upside intact
Despite this guidance, the team at Bell Potter has maintained its buy recommendation and $14.60 price target on Catalyst Metals shares.
From yesterday's closing price of $5.65, that indicates an upside potential of 139%.
This growth could seemingly be set to come in the long term.
Bell Potter has adjusted its earnings per share outlook.
Earnings per share are now expected to fall in FY26 by 19% and then recover and increase by 11% in FY27 and a further 14% in FY28.
