8 Most Undervalued Gold Stocks To Buy According To Analysts

06. Gold Fields Limited (NYSE:GFI)

Upside Potential: 22%

Forward Price to Earnings (P/E) Ratio: 8.53

Number of Hedge Fund Holders: 20

Gold Fields Limited (NYSE:GFI) is a global gold producer with mining operations spread across Chile, South Africa, Ghana, Canada, Australia, and Peru. The company also explores copper and silver, adding diversity to its portfolio. As of October 12, Gold Fields Limited (NYSE:GFI) has a forward P/E ratio of 8.53, suggesting it is trading at an attractive valuation relative to its future earnings. With a current share price of $15.40 and a target price of $18.79, the stock offers an upside potential of 22%, making it a compelling choice for inclusion in our list of undervalued gold stocks.

In Q2 2024, Gold Fields Limited (NYSE:GFI) reported solid financials, surpassing analysts’ earnings expectations with EPS of $0.4344 compared to a forecast of $0.34. Despite production setbacks, the company generated $320 million in adjusted free cash flow, thanks to higher gold prices. Although first-half production saw a 20% year-over-year decline, the outlook for the second half remains optimistic. The management expects production to pick up as the Salares Norte mine ramps up and operational challenges at South Deep, St Ives, and Gruyere are addressed.

Operationally, the company faced headwinds like adverse weather impacting Gruyere’s operations and supply disruptions. However, Gold Fields Limited (NYSE:GFI) has taken corrective actions, including recovery plans at several mines, ensuring a stronger performance in the latter half of the year. Management remains confident in achieving their annual production guidance of 2.05–2.15 million ounces, with over 1.2 million ounces expected in H2 2024.

The company’s financial discipline is further reflected in its commitment to shareholder returns, distributing 40% of its normalized earnings as dividends. Additionally, strategic moves such as the recent acquisition of Osisko Mining’s Windfall project highlight its focus on long-term growth. Gold Fields Limited (NYSE:GFI) is also progressing in sustainability initiatives, with renewable energy projects underway at its Australian mines.

In conclusion, Gold Fields Limited (NYSE:GFI) attractive valuation, solid cash flow generation, dividend policy, and strategic growth initiatives make it an undervalued opportunity in the gold sector. As production normalizes in the second half of 2024, investors can expect the stock to unlock significant value, aligning with its strong fundamentals and the promising outlook ahead.