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Going inside Coeur Mining: Performance, Leverage, Outlook

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Part 7
Going inside Coeur Mining: Performance, Leverage, Outlook PART 7 OF 10

Analyst Sentiment for Coeur Mining: Why It’s Changing

Market sentiment for Coeur Mining

Coeur Mining (CDE) is a high-cost producer. Even though its cost-cutting efforts were impressive in 2015 and 2016, Coeur is still producing at higher costs than many of its peers (SIL) (RING).

Analyst Sentiment for Coeur Mining: Why It&#8217;s Changing

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Higher costs make it highly leveraged to gold and silver prices compared to other low-cost producers such as Barrick Gold (ABX) and Newmont Mining (NEM). While Coeur has reduced its debt considerably, it has kept investors away from the stock for a long time.

Analyst recommendations

The market consensus rating for Coeur Mining stock is a “buy” from 67.0% of analysts. About 33.0% are recommending a “hold.”

The average target price for CDE is $12.57 compared to its current market price of $8. That implies a potential upside of 58.0%. You should note that analysts have revised Coeur’s target price by 190.0% in the past year to reflect its high leverage to precious metal prices.

In May 2016, BMO Capital Markets Equity Research upgraded Coeur Mining to “outperform” from “market perform.” In the same report, it also upgraded Yamana Gold (AUY), Silver Wheaton (SLW), Pan American Silver (PAAS), and Detour Gold (DRGDF).

On October 3, 2016, Deutsche Bank (DB) upgraded Coeur Mining from a “sell” to a “hold.” It also increased Coeur’s target price from $7.50 to $11.

CIBC (Canadian Imperial Bank of Commerce) upgraded Coeur stock from “sector underperform” to “sector perform” on August 29, 2016. According to CIBC analyst Cosmos Chiu, “The thesis for the Coeur Mining story has changed.” Coeur’s falling cost profile and strengthening balance sheet should benefit the stock going forward. CIBC raised the stock’s target price from $9.50 to $14.50.

There haven’t been any analyst ratings changes since then. The recent changes to Coeur stock are summarized below:

  • On February 10, 2017, RBC (Royal Bank of Canada) cut its target price from $15 to $14. On January 11, 2017, it lowered Coeur’s target price from $14 to $12.
  • On February 10, 2017, after Coeur’s 4Q16 earnings release, CIBC cut its target price from $12 to $11.
  • On February 9, 2017, Canaccord Genuity raised its target price from $12.50 to $13.
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