Here's How to Play Harmony Gold Stock Before FY25 Earnings Release

Core Viewpoint - Harmony Gold Mining Co. Ltd. (HMY) is expected to report fiscal 2025 results on August 28, with earnings estimated at $2.85 per share, indicating a 190.8% year-over-year increase [1]. Group 1: Earnings and Production Outlook - Higher gold prices and strong production in Q4 are anticipated to positively impact HMY's performance, despite challenges from rising costs [2][6]. - The consensus estimate for fiscal 2025 earnings has remained stable over the past 60 days, with an Earnings ESP of 0.00% and a Zacks Rank of 3 [3]. - HMY is projected to meet its full-year production guidance of 1.4-1.5 million ounces, despite a 6% decline in output during the first nine months due to adverse weather conditions [5][6]. Group 2: Gold Price Dynamics - Gold prices have surged this year, reaching a record high of $3,500 per ounce on April 22, driven by safe-haven demand amid global trade tensions and geopolitical issues [4]. - Although gold prices have retreated from their April highs, they remained above $3,300 per ounce at the end of Q2 [4]. Group 3: Cost Pressures - HMY faces significant cost pressures, with all-in sustaining costs rising approximately 24% in Q3 and total cash costs increasing by 22% year-over-year [8]. - Labor and electricity costs are the largest components of HMY's cost structure, and while the company is pursuing energy-saving initiatives, higher electricity tariffs are expected to continue impacting margins [8]. Group 4: Stock Performance and Valuation - HMY's shares have increased by 53.4% over the past year, outperforming the Zacks Mining – Gold industry and the S&P 500 [9]. - The company is currently trading at a forward 12-month earnings multiple of 5.52, which is about 60.5% lower than the peer group average of 13.97 [12]. Group 5: Development Projects and Strategic Position - HMY has a diverse portfolio of gold development projects, including the Wafi-Golpu copper-gold project in Papua New Guinea, which is expected to significantly enhance the company's reserves [15]. - The company maintains a strong balance sheet and generates substantial cash flows, enabling it to finance development projects and enhance shareholder value [16]. - The acquisition of the Eva Copper project aligns with HMY's strategy to transition into a low-cost gold and copper producer, supported by favorable gold prices [17].