Best JSE Top40 listed platinum shares and their price forecasts in June 2022

Performance

For the year to date (ytd), it is only Sibanye Stillwater which has been able to produce a positive total return (capital gains + dividends). Northam Platinum has been the worst performer with a double digit decline, although Anglo Platinum and Impala Platinum have also yielded negative returns year to date.

In the near term we have however seen a rebound in Impala Platinum, the only company (of the four) to have produced a positive total return month to date.

Fundamentals

While all four companies look relatively cheap on a forward Price to Earnings multiple (P/E), it is Sibanye Stillwater with the most conservative looking valuation on a forward P/E of just 3.38. While P/E multiples on resource counters can sometimes be misleading (due to volatility in earnings relative to commodity cycles etc.), on a sector relative basis, Sibanye does carry the most attractive valuation in this regard. Sibanye has also offered the highest historical dividend yield.

Anglo and Impala Platinum currently have the lowest levels of total debt as a percentage of total equity.

Northam, while producing the highest return on equity, has the highest levels of debt and lowest level of short term liquidity (although still at manageable levels).

Broker ratings & price targets

Technical Analysis

Anglo American Platinum

The share price of Anglo Platinum has produced a break of trend line resistance. The price is undergoing its first pullback from the breakout. 185000 provides us with an initial resistance target from the breakout. A close below the low at 151600 would instead consider the trendline break to have failed and in turn consider the downtrend to be resuming.

Impala Platinum

The share price of Impala Platinum looks to have broken out of an inverse head and shoulders pattern.

The breakout and pattern suggest a short term reversal of trend from down to up. 23605 provides the initial upside resistance target from the move, while a close below the right shoulder at 19685 would suggest the reversal and breakout to have failed. We note that since the breakout we have seen a short term retrace, but we continue to adhere to the 19685 level before considering the failure of the inverse head and shoulders assumptions.

Northam Platinum

Northam platinum remains in a triangle shaped consolidation following its recent downtrend. The triangle consolidation is often considered a continuation pattern, as it warns of a resumption in the preceding (down) trend.

However, it is prudent to wait for a breakout. A downside breakout would be considered through a close below the lower support level of the pattern. In this scenario 16060 becomes the initial target from the move.

A close above resistance of the triangle would consider an upside break and instead allude to a short term trend reversal, with 20650 the initial upside resistance target considered.

Sibanye Stillwater

We consider a longer term range bound price environment for the share price of Sibanye Stillwater. Since reversing off the support of this range (circled blue) at 44.70, and subsequent breakout of a short term consolidation, we see the price pulling back towards the 48.50 level.

Should we see a bullish reversal off the 48.50 support level, traders may look for long entry targeting a move back towards range resistance between levels 53.80 and 56.80.

Should a bullish reversal off the 48.50 level not manifest, and instead we see a break below, we will be looking for long entry again on a reversal closer towards the lower level of support at 44.70.