Bellevue Gold Ltd (ASX: BGL) shares were sold off on Monday.
The ASX 200 gold stock sank 9% to $1.15 following the release of its full year results.
The gold miner reported a maiden net profit after tax of $75 million, which was short of consensus estimates, and reaffirmed its guidance for FY 2025.
It continues to expect production of 165,000 ounces to 180,000 ounces with an all-in sustaining cost (ASIC) of A$1,750 to A$1,850 per ounce.
While yesterday's selloff is disappointing, one leading broker believes it has created a compelling buying opportunity for investors.
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Bellevue Gold is an ASX 200 gold stock to buy
Goldman Sachs remains very positive on Bellevue Gold and thinks investors should be snapping up its shares today. Commenting on the result and guidance, it said:
BGL reported maiden net profit of A$75mn, in line with GSe though below VA Consensus. FY25 production guidance remains unchanged at 165-180koz gold production and AISC ~A$1,800/oz (GSe ~170koz and ~A$1,845/oz respectively), with BGL expecting this to be back ended at a ~200kozpa run rate by 4Q FY25 (GSe below). Beyond FY25, BGL reiterated their 5 year growth plan, with an accelerated expansion to 1.6Mtpa processing capacity driving gold production to ~250kozpa from FY28E and lowering AISC to ~A$1,500-1,600/oz (GSe largely top end).
In response, the broker has reaffirmed its buy rating on the ASX 200 gold stock with a trimmed price target of $1.70 (from $1.85). Based on its current share price of $1.15, this implies potential upside of 48% for investors over the next 12 months.
Why is it a buy?
Goldman believes that this ASX 200 gold stock is severely undervalued compared to peers. It explains:
Relative to peers, BGL remains relatively underappreciated in our view, trading at of ~0.85x NAV and pricing ~US$1,600/oz LT gold (peer average ~1.15x NAV and ~US$1,940/oz). While near-term FCF yields are impacted by the accelerated development spend, we see these returning to double digit by FY26/27E, and remaining attractive vs. peers, supporting upside to the outlook for possible future capital returns once the expansion ramps up (despite ~25% of medium-term gold sales being hedged at ~A$2,700-2,900/oz, and 31.5koz of A$3,500/oz puts in FY25). We note a 5-year resource extension adds ~30% to our valuation under a 1.6Mtpa processing scenario, for which we capture some upside in our nominal value.
All in all, this could make Bellevue Gold a great option for investors that are looking for exposure to the sky high gold price this month.
