Market analysts appear more bullish on Royal Gold than recent quarterly performance might suggest, with a Zacks “Strong Buy” rating emerging shortly after disappointing earnings figures. The central question for investors is whether strategic acquisitions that promise long-term strength will ultimately outweigh the immediate impact of missed quarterly expectations.
Strategic Moves Reshape the Investment Case
The most significant recent development for Royal Gold involves two major acquisitions finalized in late October. The company completed takeovers of both Sandstorm Gold and Horizon Copper, transactions that substantially enhance the scale and diversification of its portfolio. To fund these purchases, Royal Gold utilized $450 million from its credit facility and issued approximately 18.6 million new shares. Many market observers believe these strategic moves heavily influenced the subsequent upgrade from Zacks.
Quarterly Performance Presents Mixed Picture
When Royal Gold reported third-quarter results on November 5th, the figures revealed a complex performance landscape. While net income showed improvement—climbing to $126.8 million from $96.2 million in the same quarter last year—both adjusted earnings per share of $2.06 and revenue of $252.1 million fell short of analyst projections. Despite these shortcomings, CEO Bill Heissenbuttel emphasized record achievements in revenue and operational cash flow, which reached $174 million.
Should investors sell immediately? Or is it worth buying Royal Gold?
Analyst Confidence Defies Short-Term Disappointment
The “Strong Buy” rating assigned by Zacks on November 12th reflects a notable 6.3% increase in full-year 2025 profit estimates over the preceding three months. This suggests that financial experts weigh the company’s strategic acquisitions and resilient business framework more heavily than a single quarter’s underperformance. Royal Gold’s streaming and royalty model provides additional appeal, enabling the company to benefit from rising precious metal prices while avoiding the operational risks inherent to traditional mining operations.
The critical uncertainty remains whether Royal Gold’s expanded portfolio and enhanced scale will generate sufficient momentum to challenge its 52-week high of nearly €177, or if the stock will continue to trade at a discount to this peak valuation.
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