Torex Gold Resources (TSX:TXG): Valuation Insights After TSX30 Recognition and Media Luna Production Milestone

Torex Gold Resources (TSX:TXG) just made headlines for all the right reasons. The company cracked the TSX30 list for 2025, securing the 14th spot based on a three-year return of 347%. This recognition comes shortly after Torex achieved commercial production at its Media Luna Project and actively expanded its exploration efforts. This signals not just operational progress but also growing market confidence in the company’s future direction. Recent developments have added fuel to Torex’s share price momentum. The stock has jumped 26% over the past month and delivered a 108% return year-to-date, pushing its one-year total return to 108%. These moves reflect not just the impact of current news but a pattern of accelerating gains after announcements regarding Media Luna’s production and new asset acquisitions. While the company has grown both revenue and net income at a double-digit pace, investors have taken notice of management’s push to diversify assets in the Americas. With that much attention and share price appreciation, it is worth asking: after such a big year, is Torex Gold Resources undervalued, or is the market already factoring in most of its future upside?

Most Popular Narrative: 13.6% Undervalued

According to the most popular narrative, Torex Gold Resources is trading at a significant discount to its estimated fair value. This suggests the stock could have further upside potential if company forecasts hold true.

Structurally high gold prices, supported by macroeconomic uncertainty and global inflation, are expected to sustain attractive realized prices. This may directly boost Torex's cash flows, margins, and earnings over the coming years.

Curious about what goes into this bullish outlook? The narrative hinges on ambitious growth rates, higher profitability, and a much lower earnings multiple than usual for the sector. Want to know what assumptions power this bold price target? Check out the deeper dive to see which financial forecasts set Torex up for its current fair value calculation.

Result: Fair Value of $62.00 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent cost increases or delays to key infrastructure could limit Torex’s earnings growth, which may challenge the optimism reflected in current fair value estimates.

Find out about the key risks to this Torex Gold Resources narrative.

Another View: The DCF Model's Perspective

Alongside analyst price targets, the SWS DCF model offers its own take and also finds Torex Gold Resources to be undervalued. However, can both models be trusted at face value, or is one more reliable?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Torex Gold Resources for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Torex Gold Resources Narrative

If you see things differently or prefer to rely on your own research and perspective, crafting your own narrative takes just a few minutes. Do it your way.

A great starting point for your Torex Gold Resources research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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