We’ll now look at Wall Street analysts’ recommendations and target prices for Harmony Gold’s (HMY) stock over the next year. About 17% of analysts covering Harmony have given it a “buy” recommendation, according to Bloomberg. About 50% of analysts have issued a “hold” recommendation, and 33% have issued a “sell” recommendation. Over the years, we’ve seen the company’s share price move in line with analysts’ recommendations. The consensus target price now stands at 46.5 South African rands or ZAR.
Gold miners’ ratings
Among South African gold miners, Pan African Resources is analysts’ favorite. It has the highest percentage of “buy” recommendations at 100%. After Harmony Gold, Gold Fields (GFI) has the lowest “buy” recommendation at 20%, followed by Sibanye Gold (SBGL) at 36%, AngloGold Ashanti (AU) at 65%, and DRD gold (DRD) at 67%. The above graph presents brokers’ recommendations and percentage upside/downside from current prices.
Sibanye Gold makes up 2.1% of the VanEck Vectors Gold Miners Index (GDX).
Recent ratings changes
Deutsche Bank (DB) downgraded Harmony Gold from “buy” to “hold” on March 22, 2016, and lowered its target price from 65 ZAR to 60 ZAR. The bank believes rand gold prices are likely near their peak and sees limited upside prices.
Macquarie downgraded Harmony Gold to “underperform” from “overperform” on March 15, 2016, and also lowered its target price from 44 ZAR to 42 ZAR. The broker sees rand appreciation as detrimental to the stock. Macquarie also remains wary of Harmony’s Golpu project risks, including financing, execution, and geographic concerns.
Morgan Stanley, on the other hand, increased its target price for Harmony’s stock from 35 ZAR to 39 ZAR on March 15, 2016.
HSBC Global Research also increased its target price from 45 ZAR to 60 ZAR.