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Gold is in a powerful bull market and GFI stands out as a top gold mining stock
Gold Fields Limited combines strong growth forecasts and a discount valuation
Gold Fields Limited ((GFI - Free Report) ) is one of the market’s premier gold mining companies having outperformed the broad market and industry average on all look back periods since 2014. GFI is the eighth largest producer of gold in the world, with mines operating in Australia, Chile, Ghana, Peru and South Africa and Canada. Over the last five years the stock has compounded at an average annual rate of 38%, bolstered in part by the bull market in gold, but also in its high-level operating leverage.
Gold Fields enjoys one of the best fundamental setups among the gold mining sector, with some of the highest growth forecast for its top and bottom line, complimented by a bargain valuation and institutional level scale. In addition to robust fundamentals, the stock is also showing signs of technical strength; both GFI stock and gold itself are forming compelling bullish patterns.
Finally, Gold Fields has experienced significant upgrades to its earnings estimates, giving it a Zacks Rank #1 (Strong Buy) rating. These catalysts all together make Gold Fields a worthy consideration for investors looking to gain exposure to gold and diversify away from the stock market.
Image Source: Zacks Investment Research
Tailwinds for Gold Mining Stocks
Gold remains in a powerful bull market, rising more than 60% this year and outperforming major equity indexes since 2019. The backdrop driving this strength, persistent geopolitical uncertainty, rising global tensions, and elevated fiscal risks, has only intensified. There is little indication that these forces will ease anytime soon. At the same time, global central banks have been accumulating gold at the fastest pace in decades, creating a structural source of demand that supports higher prices.
As noted earlier, both the underlying commodity and GFI are forming bullish technical patterns. In the chart below, we can see that GFI broke out and then pulled back into its prior range. The key levels to watch remain the upper boundary near $44 and the lower boundary around $37.50. A decisive close above or below these levels would signal the direction of the next major move. Given the strong buying flows into gold and gold-linked equities, I continue to favor an upside resolution.
Image Source: TradingView
Gold Fields Limited Shares Trade at a Discount to Growth
Gold Fields is delivering one of the strongest growth profiles in the precious metals industry. The company is expected to increase sales by 79% this year and an additional 26.5% next year, while earnings are projected to grow at an impressive 51.4% annually over the next three to five years. Few miners are generating that kind of multi-year growth outlook.
Despite this exceptional trajectory, GFI trades at a forward earnings multiple of just 14.2x. That is meaningfully below the industry average of roughly 19x and sits right in line with the company’s own long-term historical valuation. When a business with this level of earnings acceleration trades at a multiple this low, the result is a deeply discounted PEG ratio. In Gold Fields’ case, the PEG stands at just 0.28, signaling that investors are paying very little for an extremely high rate of earnings expansion.
Image Source: Zacks Investment Research
Should Investors Buy Shares in GFI?
Gold Fields offers a rare blend of high growth, strong operating leverage, and an attractive valuation. The company is expanding faster than most of its peers, yet its shares still trade at a meaningful discount to the industry. With gold in a powerful uptrend and GFI forming bullish technical patterns, the stock appears well-positioned for further gains.
For investors seeking exposure to gold, a hedge against market volatility, or simply a high-quality growth story within the mining sector, Gold Fields stands out as a compelling opportunity.
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Bull of the Day: Gold Fields Limited (GFI)
Key Takeaways
Gold Fields Limited ((GFI - Free Report) ) is one of the market’s premier gold mining companies having outperformed the broad market and industry average on all look back periods since 2014. GFI is the eighth largest producer of gold in the world, with mines operating in Australia, Chile, Ghana, Peru and South Africa and Canada. Over the last five years the stock has compounded at an average annual rate of 38%, bolstered in part by the bull market in gold, but also in its high-level operating leverage.
Gold Fields enjoys one of the best fundamental setups among the gold mining sector, with some of the highest growth forecast for its top and bottom line, complimented by a bargain valuation and institutional level scale. In addition to robust fundamentals, the stock is also showing signs of technical strength; both GFI stock and gold itself are forming compelling bullish patterns.
Finally, Gold Fields has experienced significant upgrades to its earnings estimates, giving it a Zacks Rank #1 (Strong Buy) rating. These catalysts all together make Gold Fields a worthy consideration for investors looking to gain exposure to gold and diversify away from the stock market.
Image Source: Zacks Investment Research
Tailwinds for Gold Mining Stocks
Gold remains in a powerful bull market, rising more than 60% this year and outperforming major equity indexes since 2019. The backdrop driving this strength, persistent geopolitical uncertainty, rising global tensions, and elevated fiscal risks, has only intensified. There is little indication that these forces will ease anytime soon. At the same time, global central banks have been accumulating gold at the fastest pace in decades, creating a structural source of demand that supports higher prices.
As noted earlier, both the underlying commodity and GFI are forming bullish technical patterns. In the chart below, we can see that GFI broke out and then pulled back into its prior range. The key levels to watch remain the upper boundary near $44 and the lower boundary around $37.50. A decisive close above or below these levels would signal the direction of the next major move. Given the strong buying flows into gold and gold-linked equities, I continue to favor an upside resolution.
Image Source: TradingView
Gold Fields Limited Shares Trade at a Discount to Growth
Gold Fields is delivering one of the strongest growth profiles in the precious metals industry. The company is expected to increase sales by 79% this year and an additional 26.5% next year, while earnings are projected to grow at an impressive 51.4% annually over the next three to five years. Few miners are generating that kind of multi-year growth outlook.
Despite this exceptional trajectory, GFI trades at a forward earnings multiple of just 14.2x. That is meaningfully below the industry average of roughly 19x and sits right in line with the company’s own long-term historical valuation. When a business with this level of earnings acceleration trades at a multiple this low, the result is a deeply discounted PEG ratio. In Gold Fields’ case, the PEG stands at just 0.28, signaling that investors are paying very little for an extremely high rate of earnings expansion.
Image Source: Zacks Investment Research
Should Investors Buy Shares in GFI?
Gold Fields offers a rare blend of high growth, strong operating leverage, and an attractive valuation. The company is expanding faster than most of its peers, yet its shares still trade at a meaningful discount to the industry. With gold in a powerful uptrend and GFI forming bullish technical patterns, the stock appears well-positioned for further gains.
For investors seeking exposure to gold, a hedge against market volatility, or simply a high-quality growth story within the mining sector, Gold Fields stands out as a compelling opportunity.