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Wall Street’s Take on Gold Miners before the 3Q17 Earnings

PART:
1 2 3 4 5 6 7 8 9 10 11
Part 4
Wall Street’s Take on Gold Miners before the 3Q17 Earnings PART 4 OF 11

These Factors Are Likely Impacting Ratings for Intermediate Gold Miners

Performances of intermediate gold miners

The stock performances of intermediate gold miners (RING) (GDXJ) have been slightly better than senior gold miners, on average. While intermediate gold miners have risen 9.3% YTD (year-to-date), intermediate gold miners have risen 7.7%.

These Factors Are Likely Impacting Ratings for Intermediate Gold Miners

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Individual stock performances have been varied. While Iamgold (IAG) has returned 58.3%, Eldorado Gold (EGO) has lost 29.8% as of October 6, 2017. New Gold (NGD), Yamana Gold (AUY), and Agnico Eagle Mines (AEM) have returned 12.1%, -6.2%, and 8.6%, respectively.

Agnico is the analyst favorite

Agnico Eagle Mines remains the analysts’ favorite with 63% “buy” ratings. Another 25% recommend a “hold” while 13% have “sell” ratings for the stock. The company’s consistently strong operational performance and management execution appear to be the major reasons for analysts’ optimism.

Iamgold has 54% “buy” and 46% “hold” ratings, while half of the analysts rating Eldorado Gold are recommending a “buy” for the stock. The company’s operational performance and outlook have disappointed analysts, resulting in a downgrade of its earnings estimates. 

Meanwhile, Eldorado’s mines in Turkey and Greece are facing several issues, which are probably the reason for the analysts’ ratings. At the end of May 2017, EGO had “buy” ratings from 78.6% of its analysts.

New Gold and Yamana

By comparison, 67% of the ratings for New Gold are “holds,” likely because analysts are waiting on the sidelines for New Gold’s Rainy River project to start successfully before turning positive on the stock.

Yamana Gold (AUY) has equal “buy” and “hold” recommendations, at 43% apiece. The company’s operational performance and outlook appear to have disappointed analysts, resulting in a downgrade of its earnings estimates.

In the next part, we’ll assess the changes in the analysts’ recommendations for intermediate gold miners.

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