PRU Target Price : 70 Cents, page-509

https://www.fnarena.com/index.php/2019/01/21/interest-in-gold-sector-ramps-up/

Australian dollar-exposed gold producers benefit most from the updated price expectations although, to some extent, Canaccord Genuity points out this is already priced into mid-cap producers.</p><p>Increased revenue, because of the generally flat production profiles, translates directly to higher earnings and, therefore, the gold price upgrades favour the larger producer, Macquarie adds. <strong>Perseus Mining</strong> ((PRU)), which is most leveraged to the gold price, experiences large upgrades in the broker's forecasts.</p><p>Bell Potter notes gold equities have begun to outperform the underlying metal and, while hastening to add this is not providing material for a raging bull market, agrees there are plenty of strong signs.</p><p><strong>A strong performance has been noted in larger names, suggesting to the broker mid-sized producers have work to do to catch up</strong>. Mid-cap stocks appear to have the highest valuation multiples, owing to superior asset quality, balance sheet strength and free cash flow.</p>