DRDGOLD (NYSE:DRD) Valuation Check After Five Year Wage Agreement And Recent Share Price Pullback

Simply Wall St.

Feb 07

DRDGOLD (DRD) recently concluded a five year wage agreement with the National Union of Mineworkers at its Ergo Mining operations, easing strike risks and giving investors clearer visibility on labour ...

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Its 90 day...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"DRD":"DRDGOLD Ltd ADS","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","BK4017":"黄金","NYSE":"纽交所"},"translate_title":"DRDGOLD（纽约证券交易所股票代码：DRD）在五年工资协议和近期股价回调后进行估值检查","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NYSE":1.5,"DRD":1.5,"DCF":1},"content_text":"DRDGOLD (DRD) recently concluded a five year wage agreement with the National Union of Mineworkers at its Ergo Mining operations, easing strike risks and giving investors clearer visibility on labour stability and production continuity. See our latest analysis for DRDGOLD. Despite the new five year wage agreement, DRDGOLD’s share price has come under pressure in the short term, with a 1 day share price return of a 5.1% decline and a 7 day share price return of a 12.6% decline. Its 90 day share price return of an 18.7% gain sits alongside a very large 1 year total shareholder return of about 2.8x, suggesting that longer term momentum has been strong even as recent sentiment has cooled. If this labour deal has you thinking more broadly about mining and materials exposure, it could be a good moment to scan our list of 21 elite gold producer stocks as potential ideas to research next. With DRDGOLD trading at a sizable intrinsic discount and a value score of 4, the key question now is whether the recent pullback leaves it undervalued or whether the market is already pricing in future growth. AdvertisementPrice-to-Earnings of 19.4x: Is it justified? On a P/E of 19.4x at a last close of $31.02, DRDGOLD screens cheaper than both its US metals and mining peers and the broader peer group averages. The P/E multiple compares the current share price to earnings per share, so it gives you a quick sense of how much investors are paying for each dollar of earnings. For a profitable gold tailings retreatment business like DRDGOLD, this is a straightforward way to line the company up against sector peers that also generate earnings from resource extraction. Here, DRDGOLD is described as good value on its P/E of 19.4x versus the US metals and mining industry average of 26.3x and the same 26.3x peer average figure. Coupled with high quality earnings, a 25.2% return on equity and earnings growth of 68.8% over the past year, that lower multiple suggests the market is pricing its earnings at a discount compared to many competitors with similar business models. Because the fair ratio could not be calculated, there is no statistical anchor for where the P/E might settle over time. There is only a simple comparison that currently leans in DRDGOLD’s favour against the industry and peer averages. See what the numbers say about this price — find out in our valuation breakdown. Result: Price-to-Earnings of 19.4x (UNDERVALUED) Beyond multiples, our SWS DCF model estimates a future cash flow value of $92.20 per share for DRDGOLD, compared with the current share price of $31.02. The model projects future cash flows from the business and discounts them back to today using an appropriate rate, which gives a single fair value estimate in today’s dollars. For a long established, profitable gold producer with high return on equity and forecast revenue growth of 29.2% per year, anchoring on cash flows instead of just earnings multiples can be useful, especially when sentiment around commodities can shift quickly. Look into how the SWS DCF model arrives at its fair value. Result: DCF Fair value of $92.20 (UNDERVALUED) However, you still need to weigh company specific risks, such as its reliance on South African tailings assets and exposure to commodity price swings, when testing this thesis. Find out about the key risks to this DRDGOLD narrative. Another way to look at DRDGOLD’s value The 19.4x P/E against a 26.3x industry and peer average points to DRDGOLD trading at a discount, but that gap alone does not tell you how much room there really is for mispricing. It simply highlights that the market is paying less for each $1 of DRDGOLD’s earnings than for many competitors. The question for you is whether that discount reflects genuine risk in the business or if it is a potential opportunity that the market has not fully reassessed yet. See what the numbers say about this price — find out in our valuation breakdown. NYSE:DRD P/E Ratio as at Feb 2026Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out DRDGOLD for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 55 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.  Build Your Own DRDGOLD Narrative If you see the numbers differently or prefer to test your own assumptions, you can build a personalised DRDGOLD view in just a few minutes. To begin, use Do it your way. A great starting point for your DRDGOLD research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision. Looking for more investment ideas? If you are serious about building a stronger portfolio, this is the moment to widen your search and let high quality screens do some of the heavy lifting.  Spot potential bargains early with our list of screener containing 25 high quality undiscovered gems that pair solid fundamentals with the potential to surprise the market. Strengthen your portfolio’s core by focusing on companies in the solid balance sheet and fundamentals stocks screener (46 results) that can better handle rough patches. Lock in cash flow potential with our hand picked 15 dividend fortresses that combine income with business resilience.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"}}}