Performance of Companies in the Metals and Mining Sector on July 26
On Tuesday, July 26, the stocks related to base metals and precious metals recovered because of the stability in the price of the respective metals.
After declining on Monday, July 25, and starting the week on a weaker note, gold and silver gained stability on July 26.
After starting the day on a weaker note by declining in the early morning hours on July 26, copper prices recovered as the day progressed.
US Midwest aluminum premiums are currently quoted at $0.07 per pound. Premiums have fallen slightly in July and are now down more than 22% year-to-date.
During Century Aluminum’s (CENX) 1Q16 earnings conference call, the company’s CEO, Mike Bless, called China “a wildcard from both a demand and a supply standpoint.”
China’s aluminum exports rose by 10% YoY (year-over-year) in 2015.
The LME (London Metals Exchange) three-month aluminum contract closed at $1,605 per metric ton on July 25. Aluminum has lost 2.6% so far in July.
Alcoa (AA) is gearing up for its split, which is scheduled in the second half of 2016. After the split, the value-added company—which will be named Arconic—will produce precision components and other value-added products.
Iamgold has the lowest EBITDA margin among its peer group. This is mainly due to higher costs, which result in a lower valuation multiple.
Investors usually look at mining companies’ abilities to generate FCF (free cash flow) in a volatile precious metal price environment.
Iamgold (IAG) has delivered EPS (earnings per share) misses for five of the last eight quarters. Analysts are expecting EPS of -$0.02 in 2Q16.
Iamgold’s revenue expectations for 2016 are $972 million, which is an increase of 6% YoY. Higher gold prices will be the main driver for revenue growth.
Credit Suisse (CS) upgraded Iamgold (IAG) from “underperform” to “neutral” on June 30, 2016. It also raised the target price from $3 to $5.25.
In this part, we’ll look at analyst ratings for Iamgold (IAG). Currently, two analysts have a “buy” rating, eight have a “hold” rating, and seven have a “sell” rating.
At the end of 1Q16, Iamgold (IAG) had $658 million in cash compared to $548 million at the end of 4Q15. The company also increased its revolving credit facility.
Iambold’s (IAG) Essakane cash costs fell 9% YoY to $691 per ounce in 1Q16. This was mainly due to reduced fuel prices, favorable exchange rates, and improved plant performance.
Iamgold (IAG) expects production to take off in the second half of the year to reach its full-year guidance of 770,000–800,000 ounces.
Iamgold is slated to report its 2Q16 results on August 3, 2016, after the Market closes. In this series, we’ll look at analyst recommendations and 2Q16 earnings expectations.
For the past two years, PPG Industries has been trading at a one-year forward PE multiple in the range of 13.50x–20.50x.
In 2Q16, PPG Industries’ Glass segment contributed ~7% of total revenue, reporting revenue of $282 million in 2Q16, as compared to $279 million in 2Q15.