Gold Road Snubs Gold Fields’ US$2.1 Billion Offer - What’s Next for the Deal?
Published: 3/24/2025
Author:FRC Analysts
Excerpt:
Valuation Analysis: Is There Upside for GOR?
Gold Road currently trades at a forward price-to-earnings (P/E) ratio of 10.7x, with an enterprise value (EV) to forward EBITDA multiple of 5.8x. By comparison, gold sector averages stand at 16.7x P/E and 8.1x EV/EBITDA (Source: S&P Capital IQ). Applying these multiples to Gold Road’s metrics suggests a potential valuation lift. If valued at the sector P/E of 16.7x, GOR’s share price could rise to A$3.84 vs the current price of A$2.45, a 57% upside. Similarly, using an 8.1x EV/EBITDA multiple suggests a valuation of A$3.50, a 43% upside.
Gold Fields’ A$3.05 bid falls short of this range, supporting Gold Road’s claim of undervaluation. We believe Gold Fields needs to raise its offer to align with market multiples and Gold Road’s growth prospects.
Forecast: Should Gold Fields sweeten its offer, GOR could see a rerating toward A$3.50–A$3.80 in the near term. Absent a deal, organic growth and gold price tailwinds may gradually close the valuation gap, though patience will be key for investors.
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