HAR: Higher Multiple And Copper Project Will Eventually Disappoint Expectations

Analysts have raised their price target for Harmony Gold Mining from approximately $220 to about $270 per share. They cite a higher discount rate, lower long term revenue growth and profit margin assumptions, and a rerating to a richer future P/E multiple that together better reflect the company’s risk profile and earnings quality.

What's in the News

• Approved the high-margin, long-life Eva Copper Project after a three-year feasibility update and FEED phase with Tier 1 contractors, significantly de-risking the development pipeline and adding a major copper asset to complement its gold portfolio (Key Developments)
• Targets first copper production from Eva in the second half of 2028, timed to coincide with an expected structural copper supply gap that could support higher prices and counter-cyclical cash flow (Key Developments)
• Project Eva is expected to operate for at least 15 years with strong margins, enhancing Harmony Gold Mining's long-term resilience, growth profile, and cash flow generation across commodity cycles (Key Developments)
• Independent analysis estimates the Eva Project will contribute more than AUD 17 billion to Queensland's gross state product over its mine life and create significant construction and steady-state employment in the state's North West region (Key Developments)
• Reported first-quarter fiscal 2026 production of 12 128 kg of gold, an 8% decline from 13 131 kg in the prior quarter, but still on track to meet full-year production guidance (Key Developments)

Valuation Changes

• Fair Value Estimate has risen meaningfully, increasing from about ZAR 220.33 to approximately ZAR 269.57 per share. This reflects a higher assessed equity value despite more conservative operating assumptions.
• Discount Rate has risen slightly, moving from 17.75 percent to 18.87 percent. This indicates a modestly higher required return to compensate for perceived risk.
• Revenue Growth has been revised lower, with long term annual growth expectations falling from roughly 12.36 percent to 9.55 percent. This signals a more cautious outlook on top line expansion.
• Net Profit Margin has fallen significantly, with the long term margin assumption reduced from about 60.24 percent to 21.73 percent. This implies a materially leaner profitability profile.
• Future P/E has rerated sharply higher, increasing from around 3.9x to approximately 13.4x. This suggests the market is expected to assign a richer earnings multiple over the forecast horizon.