African Rainbow Minerals Limited

JSE:ARI Stock Report

Market Cap: R32.0b

African Rainbow Minerals Valuation

Is ARI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of ARI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ARI (ZAR163.85) is trading above our estimate of fair value (ZAR157.48)

Significantly Below Fair Value: ARI is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ARI?

Key metric: As ARI is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for ARI. This is calculated by dividing ARI's market cap by their current earnings.
What is ARI's PE Ratio?
PE Ratio10.2x
EarningsR3.15b
Market CapR31.99b

Price to Earnings Ratio vs Peers

How does ARI's PE Ratio compare to its peers?

The above table shows the PE ratio for ARI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average23.3x
MDI Master Drilling Group
12.3xn/aR2.0b
NPH Northam Platinum Holdings
24.9x30.8%R44.6b
SAP Sappi
50.8x43.0%R29.4b
KIO Kumba Iron Ore
5.3x-9.1%R109.7b
ARI African Rainbow Minerals
10.2x10.5%R32.0b

Price-To-Earnings vs Peers: ARI is good value based on its Price-To-Earnings Ratio (10.2x) compared to the peer average (23.3x).

Price to Earnings Ratio vs Industry

How does ARI's PE Ratio compare vs other companies in the African Metals and Mining Industry?

3 CompaniesPrice / EarningsEstimated GrowthMarket Cap
ARI 10.2xIndustry Avg. 12.1xNo. of Companies4PE01224364860+
3 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: ARI is good value based on its Price-To-Earnings Ratio (10.2x) compared to the African Metals and Mining industry average (12.1x).

Price to Earnings Ratio vs Fair Ratio

What is ARI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ARI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio10.2x
Fair PE Ratio9.7x

Price-To-Earnings vs Fair Ratio: ARI is expensive based on its Price-To-Earnings Ratio (10.2x) compared to the estimated Fair Price-To-Earnings Ratio (9.7x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst ARI forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentR163.85
R196.80
+20.1%
14.7%R220.00R154.00n/a5
Nov ’25R179.02
R196.80
+9.9%
14.7%R220.00R154.00n/a5
Oct ’25R197.61
R209.80
+6.2%
18.9%R250.00R154.00n/a5
Sep ’25R174.00
R234.40
+34.7%
17.4%R275.00R162.00n/a5
Aug ’25R212.71
R227.00
+6.7%
17.9%R275.00R162.00n/a6
Jul ’25R226.05
R218.67
-3.3%
16.5%R270.00R162.00n/a6
Jun ’25R225.84
R215.17
-4.7%
15.0%R250.00R161.00n/a6
May ’25R196.24
R195.17
-0.5%
14.7%R250.00R161.00n/a6
Apr ’25R164.48
R198.50
+20.7%
9.4%R235.00R181.00n/a6
Mar ’25R170.29
R201.83
+18.5%
9.6%R240.00R181.00n/a6
Feb ’25R185.04
R201.83
+9.1%
9.6%R240.00R181.00n/a6
Jan ’25R200.00
R197.95
-1.0%
12.5%R240.00R160.00n/a6
Dec ’24R185.04
R202.95
+9.7%
16.8%R270.00R160.00n/a6
Nov ’24R154.00
R210.83
+36.9%
17.7%R270.00R160.00R179.026
Oct ’24R170.09
R225.00
+32.3%
13.3%R260.00R180.00R197.615
Sep ’24R178.00
R231.00
+29.8%
11.2%R260.00R200.00R174.005
Aug ’24R199.08
R231.00
+16.0%
11.2%R260.00R200.00R212.715
Jul ’24R199.01
R257.60
+29.4%
7.2%R275.00R225.00R226.055
Jun ’24R210.70
R270.80
+28.5%
5.3%R294.00R250.00R225.845
May ’24R229.70
R270.80
+17.9%
5.3%R294.00R250.00R196.245
Apr ’24R230.66
R289.80
+25.6%
7.6%R330.00R270.00R164.485
Mar ’24R264.33
R297.00
+12.4%
10.8%R340.00R260.00R170.295
Feb ’24R283.90
R285.83
+0.7%
16.0%R340.00R200.00R185.046
Jan ’24R288.00
R287.50
-0.2%
15.3%R330.00R200.00R200.006
Dec ’23R296.28
R284.17
-4.1%
15.8%R330.00R200.00R185.046
Nov ’23R265.21
R275.83
+4.0%
13.3%R315.00R200.00R154.006

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

Discover undervalued companies

Merafe Resources

R3.7b

Engages in the mining and beneficiation of chrome ore into ferrochrome.

MRF

R1.49

7D

3.5%

1Y

24.2%

Mondi

UK£5.1b

Engages in the manufacture and sale of packaging and paper solutions in Africa, Western Europe, Emerging Europe, North America, South America, Asia, Australia, and internationally.

MNP

UK£272.50

7D

1.6%

1Y

-22.8%

Glencore

UK£46.4b

Engages in the production, refinement, processing, storage, transport, and marketing of metals and minerals, and energy products in the Americas, Europe, Asia, Africa, and Oceania.

GLN

UK£86.52

7D

-1.6%

1Y

-18.4%