What Are Analysts Recommending for South African Gold Miners?



South African gold miners’ ratings

Among South African gold miners, AngloGold Ashanti (AU) is analysts’ favorite. It has the highest percentage of “buy” recommendations, at 69%. Harmony Gold (HMY) and Gold Fields (GFI) have the lowest percentage of “buy” recommendations, at 20% and 29%, respectively.

Sibanye Gold (SBGL) has “sell” rating from 38% of the analysts. The graph below shows brokers’ recommendations and the percentage of upsides or downsides from the current prices.

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Change in ratings and target prices

Harmony Gold’s target price represents a potential downside of 16%. Gold Fields and Sibanye Gold have higher upside potentials of 8% and 12%, respectively. Harmony Gold has seen the highest stock price gain in 2016. Due to its increased leverage and higher gold prices, analysts have increased their target price for the stock by 239% since the beginning of the year.

Sibanye Gold has seen an upward revision of 127% in its target price since the start of the year. AngloGold Ashanti and Gold Fields have seen lower target price appreciations of 72% and 40%, respectively, as they have less exposure to South Africa.

Investors could consider the VanEck Vectors Gold Miners ETF (GDX) and the SPDR Gold Shares (GLD) to get exposure to gold miners and spot gold prices. AngloGold Ashanti forms 4.5% of GDX’s holdings.

In the final part of our series, we’ll see which South African gold miner could offer a valuation upside.


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