Why this ASX 200 stock is a buy after posting record results

ASX 200 stock Evolution Mining Ltd (ASX: EVN) made headlines yesterday after releasing its FY26 results.

As reported by James Mickleboro, the gold miner reported record FY26 profit and increased its dividend, backed by strong gold and copper output.

Other key results included: 

• Statutory profit after tax rose 59% to $1,475 million
• Underlying EBITDA increased 44% to $3,171 million with 57% margin
• Group cash flow jumped 76% to $1,389 million
• Final fully franked dividend of 21 cents per share, up 62%
• Total FY26 dividend of 41 cps, returning ~$833 million to shareholders. 

What did management say?

Commenting on the results, Evolution Mining’s Managing Director and CEO, Lawrie Conway, said:

Our record results reflect the quality of our assets and, above all, the efforts of the entire Evolution team. We are delivering on our commitment to shareholders. The record financial performance is on the back of safe, consistent and reliable operational delivery, complemented by our disciplined approach to cost and capital management. Our high-margin business is generating significant cash flow with a record Group cash flow of nearly $1.4 billion.

It was a subdued response from investors, with the ASX 200 stock rising just over 0.2% on the back of the announcement. 

However, Evolution Mining shares have risen 73% over the last 12 months. 

In good news for prospective investors, Bell Potter sees more upside for this ASX 200 stock. 

Here’s what the broker had to say. 

FY26 financial results sets fresh records

The team at Bell Potter said this ASX 200 stock delivered a record FY26 result, with revenue of A$5.56bn, underlying EBITDA of A$3.17bn and net profit of A$1.56bn, despite falling short of Bell Potter’s forecasts. 

The strong operational performance, combined with largely unhedged gold exposure, drove record earnings and free cash flow, while net gearing improved to 0% as EVN moved to A$19m of net cash. 

Management also increased its dividend payout target from ~50% to ~60% of group cash flow, supporting a total FY26 distribution of 41cps and signalling a greater focus on shareholder returns. 

FY27 guidance of 660-730koz of gold and 63-70kt of copper at AISC of A$1,795-1,995/oz was broadly in line with expectations, with higher growth capital reflecting investment in projects Bell Potter views as high-return and highly competitive for capital.

Buy recommendation in tact 

Based on this guidance, the team at Bell Potter retained its buy recommendation on this ASX 200 stock. 

It also increased its price target to $15.55 (previously $15.10). 

From yesterday’s closing price, this indicates a further upside of almost 14%. 

EVN offers fully unhedged gold and copper exposure via a portfolio of high quality, long-life assets in Tier 1 jurisdictions, overseen by a high-quality management team. EVN has demonstrated its intention to increase shareholder returns and gold price exposure. Our NPV-based valuation lifts 3%, to $15.55/sh. We retain our Buy recommendation.

The post Why this ASX 200 stock is a buy after posting record results appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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.