Last Update 18 Mar 26

Fair value Increased 3.24%

CG: Higher Metal Price Assumptions Will Drive Future Cash Flow Upside

Analysts have nudged their average price target on Centerra Gold higher, pointing to updated metal price assumptions, refreshed forecasts for revenue growth and margins, and a series of recent CA$ price target increases from major firms as the key drivers behind the new CA$32.42 fair value estimate, up from CA$31.40.

Analyst Commentary

Recent Street research around Centerra Gold reflects a mix of optimism on valuation upside and caution on execution risk, with several firms adjusting price targets following updated metal price assumptions for 2026.

Bullish Takeaways

Bullish analysts are raising price targets in both US$ and CA$, signaling that updated metal price assumptions feed into higher modeled cash flow and support a higher fair value range.
Multiple target hikes clustered over a short period suggest growing confidence that Centerra Gold's asset base can support stronger revenue and margin forecasts than previously modeled.
Upgrades, alongside price target revisions, indicate that some on the Street are becoming more comfortable with the company’s execution on its plan and its ability to translate metal price assumptions into earnings power.
The step ups in CA$ price targets contribute directly to the higher CA$32.42 average fair value estimate. This gives investors a refreshed anchor point for comparing the current share price to consensus expectations.

Bearish Takeaways

Despite higher targets, at least one major bank maintains an Underperform rating, which signals ongoing concerns about risk reward, even with improved metal price forecasts.
Some bearish analysts appear to view the recent price target changes as primarily model driven, tied to 2026 metal price inputs, rather than a reflection of improved company specific execution.
The presence of both upgrades and cautious ratings underlines that execution on costs, project delivery, and capital allocation remains a key swing factor for how close the stock could trade to the new fair value estimates.
Investors are being reminded that higher modeled values do not remove operational or commodity price risks, and that dispersion in ratings reflects differing views on how reliably Centerra Gold can deliver against updated forecasts.

What's in the News

Suspension of operations at the Langeloth Metallurgical Facility near Pittsburgh following a January 29, 2026 explosion caused by an uncontrolled chemical reaction, with no fatalities reported and regulatory agencies notified, while the company assesses downtime (Halt/Resume of Operations).
Updated 2025 year end mineral reserve and resource estimates, including proven and probable gold reserves of 5.5 million ounces and copper reserves of 1.7 billion pounds, alongside extensive drilling programs across Canada, Türkiye, and the United States and a planned 2026 exploration budget of $40 to $50 million (Product Related Announcements).
Confirmation that the Mount Milligan mine has received an amended environmental assessment and permits to continue operating through 2035, including a 10% plant throughput expansion starting in 2028 and increased stockpile capacity, with further work underway to support a potential mine life extension to 2045 (Product Related Announcements / Business Expansions).
Publication of an updated mineral resource and PEA for the Kemess project in British Columbia, outlining indicated resources of 3.3 million ounces of gold and 1.1 billion pounds of copper and inferred resources of 3.6 million ounces of gold and 1.2 billion pounds of copper, supported by 28 km of drilling in 2025 across multiple zones (Product Related Announcements).
Full year 2025 production results showing gold production of 275,316 ounces and copper production of 50,476,000 pounds, alongside 2026 consolidated production guidance of 250,000 to 280,000 ounces of gold and 50 to 60 million pounds of copper (Announcement of Operating Results / Corporate Guidance).

Valuation Changes

CA$ Fair Value: The CA$ fair value estimate has risen slightly from CA$31.40 to CA$32.42.
Discount Rate: The discount rate has fallen slightly from 7.42% to 7.39%, reflecting a modest change in the risk assumptions used in the model.
Revenue Growth: Modeled revenue growth has moved slightly higher from 19.24% to 19.89%, based on updated assumptions.
Net Profit Margin: The net profit margin assumption has increased from 16.88% to 18.02%, indicating a higher expected level of profitability in the forecasts.
Future P/E: The assumed future P/E multiple has declined from 12.86x to 12.21x, indicating a slightly lower valuation multiple being used in the updated analysis.

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Key Takeaways

Organic growth projects, operational enhancements, and reserve expansion initiatives position the company for sustainable revenue and margin improvement amid strong gold market dynamics.
Strong liquidity, disciplined capital management, and advanced ESG practices support self-funding, reduce dilution risk, and enhance access to capital and long-term valuation.
Ongoing operational risks, rising costs, and constrained revenue growth threaten Centerra Gold's margins and financial flexibility despite project development and exposure to favorable gold prices.

Catalysts

About Centerra Gold

Engages in the acquisition, exploration, development, and operation of gold and copper properties in North America, Turkey, and internationally.What are the underlying business or industry changes driving this perspective?

Centerra Gold's multi-year organic growth pipeline-including life extension and throughput expansion at Mount Milligan (PFS in Q3 2025), the low-capex Goldfield Project (first production targeted for 2028), and advanced studies at Kemess-positions the company to offset reserve depletion and sustain/grow revenues in an environment of robust gold demand driven by macroeconomic uncertainty and strong central bank buying.
Technical enhancements (e.g., higher recoveries at Goldfield due to crushing optimization, infill drilling at Mount Milligan boosting grade confidence, and potential mill upgrades) are expected to improve gold recoveries and mine productivity, enabling higher output and supporting revenue and unit margin improvement.
The company's ongoing focus on operational efficiency and cost management, exemplified by mine-to-mill integration and targeted capex on process upgrades, aim to mitigate industry cost inflation and reinforce net margins even as all-in sustaining costs rise sector-wide.
Centerra's strong cash position and debt-free balance sheet allow it to self-fund all near
and medium-term growth projects while maintaining capital returns via buybacks/dividends, reducing dilution risk and supporting per-share earnings and cash flow growth.
Strengthened ESG and sustainability initiatives (e.g., compliance with the International Cyanide Management Code, ISO 50001 certification, diversity achievements) improve Centerra's standing to access ESG-focused capital and lower cost of capital, enhancing both near-term liquidity and long-term valuation multiples.

Centerra Gold Earnings and Revenue Growth

Centerra Gold Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Centerra Gold's revenue will grow by 9.2% annually over the next 3 years.
Analysts assume that profit margins will increase from 6.2% today to 6.7% in 3 years time.
Analysts expect earnings to reach $106.3 million (and earnings per share of $1.1) by about September 2028, up from $75.3 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $350 million in earnings, and the most bearish expecting $52 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 18.6x on those 2028 earnings, down from 22.8x today. This future PE is greater than the current PE for the CA Metals and Mining industry at 18.0x.
Analysts expect the number of shares outstanding to decline by 3.8% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.44%, as per the Simply Wall St company report.

Centerra Gold Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Revised production guidance at Mount Milligan reflects persistent challenges with ore grade variability and geological uncertainty, indicating ongoing risk to future gold output and revenue, especially if further resource estimates disappoint or infill drilling does not sufficiently increase predictability.
Oksut's profitability is increasingly exposed to royalty cost inflation due to Turkey's revised, escalating royalty structure, meaning that rising gold prices could erode operating margins and reduce earnings even in favorable commodity markets.
The restart and ramp-up of multiple development projects (Thompson Creek, Goldfield, Kemess) will require substantial capital expenditures and management attention; execution or ramp-up delays, cost overruns, or bench strength limitations could result in lower free cash flow and reduced financial flexibility.
High all-in sustaining costs (AISC), especially at Oksut and in updated consolidated guidance, leave Centerra vulnerable to margin compression if gold prices soften, as reflected by recent quarters' free cash flow deficits and their dependence on currently elevated gold prices for economic project viability.
The majority of Mount Milligan's future production remains subject to the Royal Gold streaming agreement, meaning that any incremental gold produced under life-of-mine extensions will inevitably face reduced realized prices, constraining potential net revenue growth and overall asset earnings power.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of CA$12.567 for Centerra Gold based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$14.86, and the most bearish reporting a price target of just CA$9.48.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.6 billion, earnings will come to $106.3 million, and it would be trading on a PE ratio of 18.6x, assuming you use a discount rate of 6.4%.
Given the current share price of CA$11.64, the analyst price target of CA$12.57 is 7.4% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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