GROY: Index Inclusion And Capital Raise Will Support Future Cash Flow Expansion

Analysts have raised their price target on Gold Royalty by approximately 6 percent to about $5.07 per share, citing stronger expected revenue growth that more than offsets slightly higher discount rates as well as more conservative profit margin and valuation assumptions.

What's in the News

• Completed a $90 million follow on equity offering of 22,500,000 common shares at $4.00 per share, reflecting continued access to capital markets (company filing)
• Filed a follow on equity offering of common shares, setting the stage for subsequent upsizing and completion of the deal (company filing)
• Gold Royalty Corp. was added to the S&P/TSX Global Mining Index, potentially broadening its investor base through index linked fund flows (index announcement)
• Issued 2025 production guidance, expecting total 2025 GEOs around or modestly below the bottom of the 5,700 to 7,000 ounce range (company guidance)
• Directors, officers and major security holders agreed to 91 day lock up arrangements on common shares, options, warrants and restricted share units, with lock up periods ending March 12, 2026 (offering documentation)

Valuation Changes

• The fair value estimate has risen slightly from approximately $4.79 to $5.07 per share, reflecting modestly stronger fundamentals.
• The discount rate has increased marginally from about 7.73 percent to 7.78 percent, implying a slightly higher required return.
• The revenue growth forecast has increased meaningfully from roughly 62.2 percent to 76.7 percent, indicating stronger anticipated top line expansion.
• The net profit margin assumption has decreased moderately from about 54.6 percent to 50.1 percent, incorporating more conservative profitability expectations.
• The future P/E multiple has declined moderately from around 32.7x to 29.2x, reflecting a slightly less aggressive valuation framework.