Goldman Sachs Bullish on Gold, Bearish on Lithium & Select Uranium

Overview

This Goldman Sachs research report provides a coverage summary of multiple listed companies in the Australian gold, lithium, and uranium sectors, offering detailed financial forecasts and analyzing performance variances between institutional forecast prices (GSe base case) and current spot price/FX scenarios. The core conclusion is that, against a backdrop of elevated gold prices, Goldman Sachs is bullish on a group of gold producers (such as NEM, NST, BGL, etc.), viewing their valuations as attractive; conversely, it holds a bearish view on select lithium miners (such as PLS, MIN) and uranium companies (such as PDN, GGP), arguing that their current share prices have already priced in overly optimistic expectations. The report also includes long-term price forecasts for key commodities (gold, lithium, uranium, etc.) and a long-term supply-demand balance model for the uranium market.

Core views

**Gold Sector View** The report maintains an overall positive stance on the gold sector, issuing multiple Buy ratings. Specifically, Goldman Sachs is bullish on NEM (Buy, TP A$172.30, implying 17% upside), NST (Buy, TP A$25.20, implying 20% upside), BGL (Buy, TP A$1.90, implying 28% upside), RMS (Buy, TP A$5.40, implying 73% upside), WGX (Buy, TP A$7.85, implying 56% upside), and PNR (Buy, TP A$4.95, implying 79% upside). The bullish rationale rests on a constructive gold price outlook combined with these companies' strong operational capabilities and attractive valuations. By comparing financial metrics such as EBITDA, FCF yield, and dividend yield under both GSe forecasts and spot prices, the report demonstrates their earnings resilience across various scenarios. **Lithium Sector View** Goldman Sachs adopts a cautious stance on the lithium sector, assigning Sell ratings to two major players. PLS (Sell, TP A$4.20, implying 30% downside) and MIN (Sell, TP A$53.00, implying 23% downside) are considered overvalued. Although lithium prices have rebounded somewhat in the near term (average spodumene price ~US$2,400/t in Q1 2026), the report argues—based on its long-term lithium price forecasts (~US$1,308/t in 2027 and ~US$1,225/t long-term)—that current market earnings expectations for these companies are overly optimistic. For instance, detailed data shows that under the spot price scenario, PLS's 2026-2028 EBITDA and NPAT significantly exceed GSe forecasts by a wide margin, which is flagged as a risk signal. Other lithium miners such as IGO, LTR, and CXO are rated Neutral. **Uranium Sector View** Goldman Sachs's view on the uranium sector is divergent. PDN (Sell, TP A$9.70, implying 3% downside) and GGP (Sell, TP A$12.60, implying 9% downside) are rated bearishly, while DYL and BOE receive Neutral ratings. The bearish rationale likely relates to valuation and discrepancies between spot and forecast prices; for example, the difference in forward EBITDA for PDN under GSe forecasts versus the spot scenario is not particularly pronounced. Notably, the uranium supply-demand model in the report suggests the global uranium market will enter a slight deficit starting in 2026, widening significantly post-2030, indicating long-term upside price risks. However, in the short term, Goldman Sachs remains unenthusiastic about the current share price performance of select uranium miners.

Analysis framework

The core analytical methodology of this Goldman Sachs coverage update involves assessing whether individual stock valuations are justified by comparing corporate financial performance under 'GSe Base Forecasts' versus 'Current Spot Price/FX Scenarios.' First, Goldman Sachs established forecasting models (GSe) for future commodity prices (e.g., gold, lithium, uranium) and exchange rates (e.g., AUD/USD). Then, for each covered company, they calculated key financial metrics for 2026-2028—including EBITDA, Net Profit After Tax (NPAT), and Dividends Per Share (DPS)—using both pricing frameworks. By contrasting the financial data differences between these two scenarios, investors can clearly discern: how sensitive company earnings are to commodity prices (i.e., the magnitude of leverage), and whether current share prices already embed optimistic expectations far exceeding GSe forecasts (the greater the outperformance of the spot scenario over the GSe scenario, typically the higher the risk). For example, the report highlights that PLS's EBITDA under the spot scenario vastly exceeds the GSe scenario, with variances reaching hundreds of percentage points; this forms the basis for the Sell rating, as the market has already priced in highly optimistic price assumptions.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  Supply-Demand Framework

  In analyzing the uranium market, this report constructs a detailed global uranium supply-demand model (Uranium S/D Model), projecting long-term trends from 2025 to 2045 for global nuclear reactor counts, power generation, uranium demand (including initial cores and SMR demand), and supply (production by country and secondary supply). It calculates annual supply-demand balances (surplus/deficit) to serve as the foundation for judging long-term uranium price trajectories. This represents a fundamental bottom-up logic for analyzing commodity prices.

• Valuation MethodologyNAV (Net Asset Value) Method

  NAV (Net Asset Value) Method

  The report frequently references 'NAV' (Net Asset Value) and 'P/NAV' metrics. For resource companies, NAV is a common valuation method that estimates the value of a company's mineral reserves based on current or forecast commodity prices, subtracting development costs and other liabilities to derive net asset value. P/NAV is the ratio of share price to NAV; a ratio below 1 typically suggests undervaluation. The report assesses whether companies are overvalued or undervalued by comparing current share prices against NAV calculated using GSe forecast commodity prices.

• Valuation MethodologyEV/EBITDA valuation

  EV/EBITDA Valuation

  The report extensively uses EV/EBITDA (Enterprise Value / Earnings Before Interest, Taxes, Depreciation, and Amortization) multiples to value companies. This cross-sector valuation metric gauges relative value by comparing total firm value (market cap plus net debt, i.e., EV) against core profitability (EBITDA). The report presents current and forecast EV/EBITDA multiples for each company, using them as one reference point for setting target prices.

• Company Fundamentals & Financial FrameworkFree cash flow analysis

  Free Cash Flow Analysis

  Free Cash Flow (FCF) represents funds available for distribution to shareholders after capital expenditures. The report uses FCF Yield (FCF divided by market capitalization) as a key metric to gauge company value and return potential. Charts such as 'Average FCF Yield vs Production Growth' and financial data tables display FCF yields across companies. Higher FCF yields generally indicate stronger cash generation capabilities and potentially more attractive valuations.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Newmont Corporation (NEM)

  Rated Buy; the report is bullish on its value as the world's largest gold producer.

  Strengths

  Major gold miner with high production (2026E 5.249 Moz), well-controlled costs (62% EBITDA margin), and ample free cash flow (9% FCF yield).

  Weaknesses

  Not explicitly detailed in the report.

  Comparison

  Grouped with NST and EVN as large-cap gold miners; forecast EBITDA and FCF volumes significantly exceed those of mid/small-cap peers.

  Risks

  Not explicitly detailed in the report.

• Pilbara Minerals (PLS)

  Rated Sell; the report believes its share price excessively reflects optimistic lithium price expectations.

  Strengths

  Large spodumene output (2026E 876kt); remains EBITDA profitable even under GSe forecasts.

  Weaknesses

  Cost structure could lead to sharp profit declines if lithium prices fall, representing significant risk exposure.

  Comparison

  Peer lithium miner alongside IGO, LTR, MIN, etc., but exhibits the largest earnings divergence between spot and GSe forecasts, indicating the most optimistic market expectations and making it the least favored in the report.

  Risks

  Downside risk from falling lithium prices; overly optimistic market earnings expectations for the company.

• Paladin Energy (PDN)

  Rated Sell; valuation deemed unattractive given current uranium prices and outlook.

  Strengths

  Uranium producer benefiting from long-term uranium price uptrends.

  Weaknesses

  Modest near-term profitability; negative FCF.

  Comparison

  Peer uranium miner alongside DYL and BOE; PDN trades at the highest current EV/EBITDA multiple (36.7x), facing the greatest valuation pressure—a primary reason for the bearish rating.

  Risks

  Uranium prices missing expectations; operational risks; financing risks.

Key data

• Gold Spot Price (2026/06/19)US$4,195/ozGoldman Sachs forecasts a 2026 average of US$4,664/oz, long-term (nominal) of US$4,405/oz, and long-term (real) of US$3,800/oz.
• Spodumene (6%) Spot Price (2026/06/19)US$2,400/tGoldman Sachs forecasts a 2026 average of US$1,700/t and US$1,308/t for 2027.
• Uranium Spot Price (2026/06/19)US$95/lbGoldman Sachs forecasts a 2026 average of US$86-89/lb and a long-term (nominal) price of US$122/lb.
• NEM Buy Target PriceA$172.30/shareImplies 17% upside relative to the current price of A$147.40.
• RMS Buy Target PriceA$5.40/shareImplies up to 73% upside relative to the current price of A$3.13.
• PLS Sell Target PriceA$4.20/shareImplies 30% downside relative to the current price of A$5.97.
• Global Uranium Supply-Demand Balance (2026E)-10 MlbsForecasts deficits beginning in 2026 (total demand 204 Mlbs > total supply 194 Mlbs), widening significantly post-2030.

Impact & implications

The report's views suggest that, in the current commodity price environment, investors should focus on gold producers with high earnings leverage to gold prices and reasonable valuations (such as PNR, RMS, WGX, etc.), as they offer significant upside under both spot and GSe forecasts. Meanwhile, for lithium miners, the report warns that amid the current lithium price rebound, the market may be overly optimistic—particularly regarding PLS and MIN, whose profitability is heavily reliant on current elevated prices; should prices revert to GSe forecast levels, these stocks face significant earnings downgrades and valuation correction risks. For the uranium market, while long-term supply-demand fundamentals remain robust, select stocks (such as PDN, GGP) may lack further catalysts in the near term after having already fully reflected partial tailwinds.

Risks

• Adverse movements in commodity prices (gold, lithium, uranium), falling significantly below Goldman Sachs forecasts.
• Unfavorable AUD/USD exchange rate movements (e.g., AUD appreciation), impacting USD-denominated corporate earnings.
• Corporate operating expenses (Opex) and capital expenditures exceeding expectations, eroding profits.
• Global economic slowdown weakening demand for base metals and battery materials.
• Geopolitical risks disrupting uranium supply chains or hindering nuclear energy development prospects.

What to watch

• Spot price trends for gold, lithium, and uranium, and the extent of deviation from Goldman Sachs forecasts.
• Quarterly production and cost reports from covered companies to validate operational performance.
• Lithium market supply-demand dynamics, particularly spot and futures prices for lithium carbonate and lithium hydroxide in China.
• Progress in long-term uranium market supply-demand rebalancing and the pace of SMR (Small Modular Reactor) deployment.
• Movements in the AUD/USD exchange rate.