How Goldcorp’s Prospects Look Based on Its 4Q16 Earnings

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Part 5
How Goldcorp’s Prospects Look Based on Its 4Q16 Earnings PART 5 OF 6

How Analysts Are Reacting to Goldcorp’s 4Q16 Results

Wall Street ratings

Goldcorp (GG) reported a stronger-than-expected 4Q16, outlining a clear path to production growth and cost improvement in the quarter. 

Let’s look at Wall Street’s reaction after the company released its results.

How Analysts Are Reacting to Goldcorp’s 4Q16 Results

Ratings compared to peers 

Goldcorp has 50% “buy” recommendations from analysts. “Buy” recommendations for Newmont Mining (NEM), Yamana Gold (AUY), Kinross Gold (KGC), and Barrick Gold (ABX) total 58%, 44%, 21%, and 44%, respectively.

Analysts’ bullishness for Goldcorp has corrected sharply in the last year. At the beginning of 2016, 83% of analysts rated Goldcorp as a “buy.” In response to Goldcorp’s disappointing three-year forward production guidance and operational issues, analysts have pared down their estimates and ratings.

Analysts’ reactions

Following Goldcorp’s 4Q16 results, no analysts revised their recommendation on the stock. However, many analysts changed their target prices.

The Royal Bank of Canada reaffirmed its “underperform” rating on the stock on February 16, 2017. TD Securities, which has a “buy” rating on Goldcorp’s stock, lowered its target price from 20 Canadian dollars to 18.5 Canadian dollars on February 15. Canaccord Genuity downgraded Goldcorp from a “buy” to a “hold” on February 3.

Barclays, on the other hand, includes Goldcorp among its top picks in the Americas. On December 14, 2016, Barclays noted, “The gold miner Goldcorp remains our Top Pick among North America Metals & Mining. In simple terms, GG is a prospective turnaround story with relatively inexpensive valuation among its peers.”

Another way to gain exposure to precious metals is by investing in ETFs such as the Global X Silver Miners ETF (SIL) and the iShares MSCI Global Gold Miners ETF (RING).


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