Canaccord Genuity downgraded Regis Resources Ltd. to Neutral from Buy on valuation grounds, while raising its price target to A$8.00 from A$6.70. The firm cited a price-to-net-tangible-asset ratio of 1.05x as the basis for the adjustment.
The rating change follows a reassessment of Regis Resources' valuation metrics, including a P/E ratio of 9.1x and a free cash flow yield of 13%. Canaccord also lowered its underlying free cash flow forecast for fiscal 2027 to A$156 million, down from A$212 million, representing a 2% yield. The deferred tax payment forecast for the December 2026 quarter was increased to A$230 million from A$175 million.
Production guidance for FY2027 was maintained at 360,000 to 400,000 ounces, with Canaccord estimating output of 380,000 ounces. All-in sustaining costs were projected at A$2,990 to A$3,390 per ounce, with Canaccord estimating A$3,173 per ounce. Growth capital expenditure guidance was set at A$250 million to A$270 million, including A$30 million to A$35 million for the McPhillamys project and A$80 million to A$90 million for exploration.
Regis Resources reported a statutory net profit after tax of A$715 million for FY2026, an 180% increase year-over-year, alongside operating cash inflows of A$1.25 billion. Gold production reached 379,050 ounces, matching the upper end of guidance. The company ended the fiscal year with A$1.185 billion in cash and gold bullion, after distributing over A$300 million in dividends and tax payments.
The McPhillamys project valuation was updated using a reserve-based valuation of A$500 per ounce, based on industry benchmarks. Production is expected to be weighted toward the second half of FY2027, while growth capital expenditures are anticipated to be higher in the first half.
