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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 6
Wall Street’s Take on Gold Miners before the 3Q17 Earnings PART 6 OF 11

Analysts Seem to Like These Royalty and Streaming Miners the Most

Performances of royalty and streaming companies

Royalty and streaming companies have significantly outperformed the benchmark index (GDX) as well as mining peers YTD (year-to-date). As of October 6, 2017, this group has returned 30.1% on average—significantly higher than GDX’s 12.1% and GLD’s 10.3%.

As is the case with our first two categories of miners in this series, there’s a huge divergence in the price performances of the individual companies in this group.

Analysts Seem to Like These Royalty and Streaming Miners the Most

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Royal Gold (RGLD) has returned the most YTD at 37.2%. Franco-Nevada (FNV) follows closely with a YTD gain of 32.1%. Sandstorm Gold (SAND) and Wheaton Precious Metals (SLW) (previously known as Silver Wheaton) have returned less than the group average at 20.3% and 2.4%, respectively.

Ratings for royalty companies

The business model of royalty companies is usually more stable than their mining counterparts. Their cash flows are also more predictable. For this reason, analysts don’t have any “sell” ratings for any of these stocks.

Wheaton Precious Metals has the most “buy” ratings, amounting to 92%, compared with 8.0% “hold” ratings. Sandstorm trails, with 80.0% “buy” ratings and 20% “hold” ratings, while 71% are recommending a “hold” for FNV stock.

Based on their current market prices and target prices, Wheaton has the highest potential upside at 40%, while FNV has the lowest potential downside at 3.3%.

In the next part, we’ll take a look at the recent rating changes for royalty and streaming companies.

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