Shares in Westgold Resources Ltd (ASX: WGX) have been on the slide since the company released its quarterly report this week, but if you ask the analysts at Macquarie, that's just more reason to buy.
Macquarie ran the ruler over the company's quarterly and issued a note to their clients with an outperform rating on Westgold shares and a bullish price target, which we'll get to shortly.
First, let's have a look at what Westgold reported this week.
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Production hitting targets
The company said in its third-quarter report that it had produced 93,145 ounces of gold, down markedly from the 111,418 ounces produced in the previous quarter.
The company said the lower production was largely driven by lower head grades at its Starlight mine, from its New Murchison operations and from Beta Hunt in the Southern Goldfields.
The company said production was as expected.
As it said:
Production from Westgold's assets was in line with expectations in Q3 FY26. With no immediate impediments to the ramp up in mining rates at Bluebird and Beta Hunt, ventilation upgrades at Big Bell completed, and no major plant shutdowns scheduled for Q4, the Company is in a strong position to achieve its production targets for the year. Westgold maintains its production guidance for FY26 of 345,000 – 385,000oz, having produced 288,500oz for the financial year to the end of Q3 FY26.
The company finished the quarter with cash, bullion, and liquid investments worth $856 million, up $202 million over the period.
Westgold said the result "was driven by an increase in realised gold price to $7,080/oz and a competitive AISC margin of $3,742/oz''.
These figures also do not include the company's significant stake in Valiant Gold Ltd (ASX: VAL), which listed on the ASX on March 27.
Shares looking cheap
Macquarie said in its note to clients that Westgold's production was in line with consensus estimates and 4% up on what they were expecting.
They added:
Production from Murchison beat our estimates by 11%, and Southern Goldfields missed by 10% which was driven by lower gold grades milled (offset slightly by higher throughput).
Macquarie reduced its price target on Westgold shares by 5% due to short-term earnings per share changes, but still has a bullish target of $9 per share on the company.
If the shares were to reach that level, it would be a new 12-month high, with the current high watermark sitting at $8.16.
On Thursday, the shares were changing hands for $5.41, down 8.3% on the day. Westgold is valued at $5.57 billion.
