Goldcorp’s Bulls: Where Are They Now?
Wall Street ratings
As of June 20, 2017, 52% of analysts covering Goldcorp (GG) have recommended a “hold” on the stock. Goldcorp has “buy” recommendations from 43% of analysts, and “sell” recommendations from only 4% of analysts. Until December 2016, the majority was recommending a “buy” for the stock.
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The company has reset expectations in terms of production, which has resulted in weaker-than-expected production growth in the short-to-medium term. This led the stock to underperform and caused analysts to turn away.
The latest recommendation change for Goldcorp’s stock came in March 2017 from RBC Capital Markets. The firm upgraded GG from “underperform” to “sector perform.” The reasoning for the upgrade was the pullback in the stock’s price, which, in RBC’s opinion, offered attractive returns.
Jefferies’ analysts increased Goldcorp’s target price from $14.5 to $15 on April 18, 2017. In the firm’s recent report, the earnings estimate for Goldcorp was slashed from $0.41 per share to $0.38 per share for 2017.
Morgan Stanley reiterated its “overweight” rating on Goldcorp stock on May 1, 2017. The firm now has a price target of $17 for the stock. It initiated coverage of the stock in August 2016 with a target price of $22. Notably, Morgan Stanley stated in its initial investment thesis that Goldcorp could offer better risk-to-reward outlooks than Barrick Gold (ABX) and Newmont Mining (NEM).
Citi expects only three miners—Polymetal International, Randgold Resources (GOLD), and Goldcorp—to deliver positive production compound annual growth rates over the next five years.