Altius Minerals (TSX:ALS) Backs Serpent Gold Project, Is More Upside Already Priced In?
Orogen Royalties’ acquisition of the Serpent gold project in central Nevada, built in partnership with Altius Minerals (TSX:ALS), puts fresh attention on Altius’ role in district-scale gold exploration and its wider royalty portfolio.
That Serpent deal lands at a time when Altius Minerals’ share price has strong momentum, with the stock at CA$66.56 after a 61.32% year to date share price return and a 117.12% 1 year total shareholder return. This points to investors reassessing both growth potential and risk in its royalty portfolio.
Scan how Altius Minerals compares with other royalty and resources plays showing strong momentum and fundamentals by reviewing the curated 5 high quality undervalued stocks today.
After a 117.12% 1 year total return and a share price just shy of its CA$68.71 target, is Altius Minerals still priced for more, or has most of the easy upside already been taken?
Most Popular Narrative: 40% Overvalued
Altius Minerals trades at CA$66.56, while the most followed narrative pegs fair value closer to CA$66.29, built on rich profit assumptions and premium earnings multiples.
The analysts have a consensus price target of CA$66.29 for Altius Minerals based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$79.0, and the most bearish reporting a price target of just CA$54.0.
Want to see what justifies that kind of spread on Altius Minerals? The narrative leans on aggressive top line expansion and a future earnings multiple far above the sector. It is worth examining which profit and margin forecasts would need to land almost perfectly for this to hold up.
Result: Fair Value of CA$66.29 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
Still, if Altius Minerals rapidly puts its roughly $540m liquidity to work in higher quality royalties, or if key projects like Chapada outperform, that fair value narrative could shift quickly.
Find out about the key risks to this Altius Minerals narrative.
Another View On Altius Minerals’ Valuation
The analyst narrative leans on earnings and P/E assumptions, yet Simply Wall St’s DCF model tells a different story. On that cash flow view, Altius Minerals at CA$66.56 trades about 20.6% below an estimated fair value of CA$83.80. This raises a simple question: which set of assumptions do you trust more?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Altius Minerals 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 5 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Mixed messages on Altius Minerals so far? Use the valuation work as a starting point, then pressure test the assumptions yourself and weigh the trade off between upside and risk by reviewing the 3 key rewards and 3 important warning signs
Looking for more investment ideas beyond Altius Minerals?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data 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 financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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