Sibanye Stillwater LimitedNYSE: SBSW

I reiterate my “Buy” rating for Sibanye Stillwater stock despite recent underperformance, expecting a reversal driven by cost-cutting measures and potential higher PGM prices. Sibanye's financials show mixed results, with increased PGM production but lower selling prices, leading to a 54% YoY drop in EBITDA and a negative bottom line. Strategic initiatives, including debt covenant uplift, refinancing, and operational restructuring, have bolstered Sibanye Stillwater's balance sheet, enhancing financial flexibility and positioning for future profitability.

Sibanye Stillwater has secured a refinancing package, enhancing its interim liquidity. Operational challenges persist, with the firm's U.S. PGM operations at risk. However, I think investors have already priced this in. South Africa's load-shedding has abated, and a regional interest rate pivot is likely. This could lead to higher asset valuations.

Sibanye-Stillwater on Thursday said its IT systems had been the subject of a cyberattack causing limited disruption to its global operations.

Although facing financial challenges and liquidity issues, Sibanye Stillwater Limited is experiencing a cyclical uptrend that could result in a medium-term increase in stock prices. The company is making efforts to restructure and reduce costs, which could lead to substantial savings down the line. Despite concerns about the company's future and the possibility of higher prices for essential PGM metals, the market's outlook remains optimistic for SBSW.

Sibanye Stillwater in South Africa announced on Thursday that it will be closing its 4 Belt shaft at Marikana and cutting 855 jobs due to the inability to make it profitable amidst low PGM prices.

Sibanye Stillwater's stock has been lagging behind the market for the past 3 years, declining by 65% while the S&P 500 has seen a return of 22%. However, there are signs that this trend could be changing. Despite lower metal prices, the company's cost-cutting measures and emphasis on environmentally friendly metals position it as undervalued and with room for growth. It is possible that the stock has reached its lowest point, and with the implementation of management's strategic plan and an increase in commodity prices, a recovery could be on the horizon.

The PGM market is displaying signs of recovery, with leading automakers planning to continue ICE production for the near future. SBSW's 2023 results are encouraging given the challenging PGM market conditions. The company implemented effective cost-cutting measures, saving $375 million. SBSW has maintained a strong balance sheet with sufficient liquidity and a conservative capital structure, holding $1.397 billion in cash and $1.363 billion in long-term debt.

Kitco News - Sibanye-Stillwater (JSE: SSW) reported today damage to its Siphumelele shaft, SA PGM operations in Rustenburg, has resulted in suspension of production from the shaft.

Sibanye Stillwater's share price has plunged over 50% year-to-date due to the decline in rhodium and palladium prices. The company's gold mining operations in South Africa are high-cost and about a third is unprofitable, even with gold at all-time highs. Sibanye's investments in battery metals and recycling ventures raise questions about the company's capital allocation strategy.