NEW YORK (TheStreet) -- Royal Gold (RGLD - Get Report) shares had coverage initiated with an "overweight" rating by analysts at Morgan Stanley (MS - Get Report) on Thursday. The firm set a price target of $77 on the shares, representing a 28% increase from the company's previous closing price.
Royal Gold is up 1.31% to $60.93 in early-market trading on Thursday.
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Separately, TheStreet Ratings team rates ROYAL GOLD INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ROYAL GOLD INC (RGLD) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- RGLD's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 27.73, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for ROYAL GOLD INC is currently very high, coming in at 93.66%. Regardless of RGLD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RGLD's net profit margin of 34.87% significantly outperformed against the industry.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- RGLD, with its decline in revenue, underperformed when compared the industry average of 4.8%. Since the same quarter one year prior, revenues fell by 22.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Metals & Mining industry average, but is greater than that of the S&P 500. The net income increased by 211.7% when compared to the same quarter one year prior, rising from $6.46 million to $20.14 million.
- You can view the full analysis from the report here: RGLD Ratings Report