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Analysts’ Favorites: A Look at the Top 10 Gold Miners

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Part 5
Analysts’ Favorites: A Look at the Top 10 Gold Miners PART 5 OF 11

Coeur Mining Ranks 4th in the Top 10: Are Analyst Ratings Improving?

Analyst ratings for CDE

Coeur Mining (CDE) is the largest US-based primary silver producer and a significant gold producer. Its operations are spread across North America and South America. Coeur Mining has relatively higher costs than its peers (SIL), which makes it more leveraged to the changes in precious metal prices.

According to the consensus compiled by Thomson Reuters, nine Wall Street analysts cover CDE stock. Of these analysts, 56% rate the stock as a “buy,” and 44% rate it as a “hold.” There are no “sell” ratings on the stock.

Coeur Mining Ranks 4th in the Top 10: Are Analyst Ratings Improving?

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The implied upside potential for CDE stock based on its target price of $11.60 is 26.6%. Its close peers have varying upside potentials: 

  • Hecla Mining (HL): 17.1%
  • First Majestic Silver (AG): 59.6%
  • Tahoe Resources (TAHO): 51.2%
  • Pan American Silver (PAAS): 24.2%

Coeur Mining’s target price has seen a downward revision of 13% in 2017 year-to-date (or YTD). This is mainly due to the company’s weak operational performance in 1H17.

Returns for CDE

Coeur Mining (CDE) stock has returned 1.1% YTD until the end of September, and its stock has underperformed its peers. Its production performance has been weak due to lower grades at many of its mines.

In addition, its costs have also been higher year-over-year. The company has traditionally been a high-cost producer compared to its peers.

Valuations

Coeur Mining’s forward EV-to-EBITDA1 multiple is 8.6x. This multiple reflects a 10% discount to the average multiple of primary silver peers. 

CDE’s higher-than-average costs and concerns regarding future production growth may have led to the discount. There are, however, several catalysts that could narrow the valuation gap going forward. Its Rochester expansion could lead to cost reductions and generation of free cash flow, which would be positive for the company.

  1. enterprise value to earnings before interest, tax, depreciation, and amortization
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