Royal Gold reports Q1 results today with options positioning telling a distinctly bullish story — one backed up by a steady retreat in short selling over the past month.
Options traders are leaning more bullish than they have been in weeks. The put/call ratio has fallen to 0.44, nearly 0.7 standard deviations below its 20-day average of 0.47, and close to the lower end of the past year's range. That's the opposite of a hedged or defensive posture into the print. The stock has recovered well from a rough month — down 10% over the last 30 days but up nearly 5% in Wednesday's session alone to close at $236.88 — suggesting fresh demand rather than relief covering.
The short-selling picture reinforces that read. Bears have been pulling back steadily. Short interest measured 2.3% of free float as of May 5, down more than 3.5% over the past month from a peak near 2.5% in early April. The borrow market is wide open: cost to borrow runs at just 0.47% annually, and availability is ample. There is no sign of squeeze pressure, and no sign of aggressive new short conviction building into today's release.
Analyst opinion skews constructive, though not without reservation. UBS initiated with a Buy and a $325 target earlier in April — the most recent bellwether action — pointing to Royal Gold's royalty and streaming model as offering gold exposure without operational risk. The consensus price target of ~$335 implies around 42% upside to Wednesday's close. The bull case centres on the Pueblo Viejo expansion and improving silver recoveries lifting royalty volumes. The bear case focuses on silver recovery underperformance at Pueblo Viejo and lingering uncertainty from its Mt. project pre-feasibility study. Bank of America maintains an Underperform rating with a $203 target — well below the stock's current level — making it the clearest outlier among the Street. Scotiabank downgraded in January to Sector Perform, adding a note of caution on valuation even as it held a $335 target. At a PE of roughly 17.8x and an EV/EBITDA near 11.2x — both compressing modestly over the past month — the stock is cheaper than it was, but analysts are still divided on whether that's cheap enough.
Institutional backing is substantial and has been growing. Capital Research lifted its position by 2.2 million shares to reach 13.3% of shares outstanding. BlackRock added 2.3 million shares to hold 11%. Vanguard added 1.7 million. That breadth of accumulation from the three largest holders signals conviction from long-only capital, even as insiders — the CFO and a director — sold a combined ~$1.4 million of stock in early March at prices well above current levels.
Peers had a tougher week: WPM fell 3.6%, OR dropped 4.4%, and AEM shed nearly 6%, while Royal Gold held up far better on a relative basis. The print will test whether the company's royalty model is actually delivering the volume growth that justifies that relative resilience — and whether silver recovery at Pueblo Viejo is finally moving in the right direction.
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