In a report released today, Jason Fairclough from Bank of America Securities maintained a Hold rating on Harmony Gold Mining (HMY – Research Report), with a price target of $14.73.
Jason Fairclough has given his Hold rating due to a combination of factors influencing Harmony Gold Mining’s current and future performance. Despite a positive outlook on gold prices, with forecasts suggesting an increase to $3,500/oz, the company’s high-cost structure remains a concern. Harmony Gold operates with a high-cost position, which makes its profitability highly sensitive to fluctuations in gold prices.
Additionally, the company faces challenges with declining production levels, which could further elevate costs. Safety issues also persist, as evidenced by a troubling track record of fatalities, although management is making efforts to improve this aspect. While there are opportunities for organic growth, such as the Mponeng reserve conversion and the Eva copper project, these factors collectively justify a cautious Hold rating.