A stronger gold production forecast for FY27 from Regis Resources Ltd (ASX: RRL) has failed to impress the analysts at Macquarie, who have downgraded their price target on the company.
The Macquarie team still thinks investors can prosper, however, with an outperform rating on the stock and a bullish price target, which we'll get to shortly.
First, let's look at what Regis said in a statement to the ASX late last week.
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How much gold will Regis Resources produce?
The company said it expected to produce 360,000 to 400,000 ounces of gold this financial year across its Duketon and Tropicana operations, at an all-in sustaining cost of $2,990 to $3,390 per ounce.
This compares to 379,000 ounces produced in FY26. The company also expects to spend $80 to $90 million on exploration.
Regis added:
Duketon gold production for FY27 is expected to be higher than FY26 and slightly skewed towards the second half of the year. The increase is a result of higher production from Garden Well and Rosemont. AISC guidance reflects increased diesel price assumptions along with the previously noted inclusion of the opportunistic higher cost ounces from BuckWell. At Tropicana, production guidance is down slightly year on year. Lower open pit ore production at Havana results in a higher proportion of lower grade stockpile mill feed, compared to FY26. AISC impacts of this lower production are reflected in the guidance for this year.
The company will also spend $30 to $35 million at its McPhillamys project as it progresses towards a final investment decision (FID) expected in the first half of calendar year 2028.
ASX gold shares still looking like good value
Macquarie said in its note to clients that the midpoint of the company's guidance, 380,000 ounces, was 3% below Visible Alpha consensus estimates, while costs were higher.
But the analysts said the company had plenty of options.
With more than $1.1 billion cash in the bank and limited short-term growth capex requirements, RRL has ample scope for increased capital management and longer dated growth optionality such as McPhillamys which has pre-production capital requirements of $1.08 billion under the Integrated Waste Landform (IWL) construction approach. But with FID not expected before 1HCY28, RRL has significant optionality to continue to build cash, increase capital management, or look to further M&A opportunities.
Macquarie said the company's dividend yield of about 6% is "exceptional" for a gold stock, and Regis had the balance sheet capacity to increase this.
Following Regis' update, Macquarie has reduced its price target on the company from $8 to $6.80, compared to $5.66 at the time of writing.
