Royal Gold initiated with a Neutral at Credit Suisse

Credit Suisse analyst Fahad Tariq initiated coverage of Royal Gold (RGLD) with a Neutral rating and $120 price target. The analyst notes the stock has outperformed seniors Franco-Nevada (FNV) and Wheaton Precious Metals (WPM) in 2022, and he sees the current valuation as fair. Tariq sees potential for increased precious metals royalty/streaming deals in what could be a subdued base metals price environment in 2023, and relative to its peers Royal Gold has lower liquidity in the near-term, although he expects the $450M drawn from the revolver to be repaid in 2023 from free cash flow. More positively, Royal Gold has been active in acquisitions and has built a high-quality portfolio by partnering with large, capable mining companies, and has maintained high margins, the analyst adds.