RED’s preliminary 4QFY24 result was mixed with gold sales of 110.8koz 3% lower than we had forecast while copper sales at Deflector was 39% weaker than our estimate. However, cash of A$453.7m was higher than we had expected, with the variance likely due to some differences during the merger completion. RED has restructured its gold hedge book, which has enabled the A$92.9m debt facility to be repaid. We have cut FY24 earnings due to the weaker production result, however this has been offset by the upgrades to our gold price outlook, which has driven 28-66% upgrades to our FY25-FY28 earnings estimates. We are upgrading our rating on RED from Hold to BUY due to the improved earnings outlook and recent underperformance of RED’s share price vs its peer group and lift our price target 4% to A$0.52.
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