DRDGOLD (DRD) Stock Forecast & Price Target

DRDGold Ltd has reported a slight quarter-over-quarter increase in gold sales, reaching 37,231 ounces, paired with a 5% rise in the average gold price to $3,429 per ounce, contributing to an adjusted EBITDA growth of approximately R1,092.9 million. Management's Vision 2028 plan outlines a significant expansion of gold operations, supported by an anticipated R7.8 billion in capital expenditures, aimed at improving liquidity and free cash flow. Furthermore, the company is effectively navigating a record gold price environment, enabling it to increase dividends despite heightened capital expenditures compared to previous years.

DRDGold Ltd has faced significant financial pressures, primarily attributed to rising labor and electricity costs, which have been exacerbated by winter tariffs and additional machine hire expenses associated with site cleanup at Driefontein. Consequently, the company's all-in costs have increased by 9% quarter-over-quarter, reaching R781 million ($44.3 million) and translating to all-in costs of R1,745,213/kg or $3,079/oz, representing a 6% year-over-year increase. The overwhelming reliance on the Ergo segment for revenue, coupled with rising operational costs, presents a concerning outlook for the company's financial health.