Alkane Resources Ltd (ASX: ALK) shares were on fire on Monday.
The ASX gold stock raced 11% higher to end the session at $1.76.
This lifted its market capitalisation to $2.4 billion, which is the highest it has ever been.
The good news is that Bell Potter thinks there’s more to come and is tipping this ASX gold stock as a buy.
What is the broker saying?
Bell Potter was pleased with the company’s half-year results release on Monday. In response to the release, the broker said:
ALK reported a 1HFY26 financial result broadly in-line with our expectations. The result was distorted by the completion of the merger with Mandalay during the period. Compared with our forecasts, revenue was a slight beat and some costs were reported below the line. Key metrics included revenue of $404m (vs BPe $385m), EBITDA of $170m (vs BPe $148m) and statutory NPAT of $65m (vs BPe $69m). [â¦] ALK’s gold hedge book remains in place, with 46,150oz @ A$2,862/oz for delivery to June 2027. Following the merger with Mandalay this is diluted down to <20% of production providing relatively greater leverage to the gold price.
But the real standout for the broker was a notable step-up in operational and financial performance during the second quarter. It believes that if this continues, the market could re-rate this ASX gold stock. It adds:
In our view, the highlight and key takeaway from the result was the significant step-up in operational and financial performance between 1QFY26 and 2QFY26, which marked the first full quarter of operation for the consolidated Alkane/Mandalay group. Group production lifted from 30.0koz to 42.8koz qoq, AISC dropped from A$2,988/oz to A$2,739/oz qoq. EBITDA (adjusted) lifted by 287%, from $38m in 1QFY26 to $147m in 2QFY26 and EBITDA (adjusted) margins lifted from 26% to 57% qoq.
While benefiting from the tailwinds of rising gold prices, it still demonstrated a substantially improved foundation for ALK. We anticipate that if ALK maintains consistent delivery at this level, the market will continue to positively re-rate the stock.
Should you buy this ASX gold stock?
According to the note, the broker has retained its buy rating and $1.95 price target on Alkane Resources shares.
Based on its current share price of $1.76, this implies potential upside of approximately 11% for investors over the next 12 months.
Commenting on its buy recommendation, the broker said:
The improving operational performance has ALK tracking to meet FY26 production and cost guidance, which is unchanged. ALK offers multi-mine gold and antimony exposure across three attractive jurisdictions, a strong balance sheet and operating platform focused on organic and inorganic growth options. We retain our Buy recommendation and $1.95/sh target price.
The post Why this $2.4b ASX gold stock could be a top buy appeared first on The Motley Fool Australia.
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More reading
- Why Bell Potter just upgraded its valuation of this ASX gold stock by 39%
- Which gold miner has just reported record production results?
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.