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Analyzing Market Sentiment: Which Silver Miner Do Analysts Favor?

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Sep. 9 2016, Updated 9:04 a.m. ET

Market sentiment

So far in this series, we’ve analyzed the key operating and financial metrics for silver miners. Here, we’ll look at market sentiment for these companies. We’ll also look at analysts’ recommendations, target prices, and potential upsides for silver miners (SIL).

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Analysts’ favorite

Among primary silver miners, Tahoe Resources (TAHO) seems to be an analyst favorite with the highest “buy” ratings at 88% and no “sell” ratings. Its current target price is $19, which implies upside potential of 43%. Its consensus target price has seen an upward revision of 35% since the start of 2016.

Silver miners’ ratings

The market consensus rating for Coeur Mining (CDE) is “buy” with 50% of ratings. Out of a total of ten analysts covering the company, 20% have “sell” recommendations and 30% have “hold” recommendations.

On August 29, 2016, CIBC World Markets upgraded Coeur from “sector underperform” to “sector perform” rating. Its target price was also raised from $9.5 to $14.5. According to CIBC, “the thesis for the Coeur Mining story has changed.” Its falling cost profile and strengthening balance sheet should benefit the stock going forward.

75% of analysts have given Hecla a “hold” recommendation while only 13% have a “buy” recommendation. At the start of 2016, Hecla had a “buy” rating from 30% of analysts. After its 2Q16 results, RBC increased the target price for Hecla Mining from $7 to $7.5.

50% of analysts rate First Majestic Silver (AG) a “hold” and 25% rate it a “buy.” The stock has “sell” ratings from 25% of analysts. At the start of the year, the company didn’t have any “sell” ratings while the majority of its ratings were “hold” at 75%.

64% of analysts have “hold” ratings on Pan American Silver (PAAS), 27% have “buy” ratings, and only 9% have “sell” ratings. At the start of the year, 33% of analysts had given PAAS a “sell” rating. Credit Suisse increased the target price for Pan American Silver from 21 Canadian dollars to 25 Canadian dollars on August 12, 2016.

After its 2Q16 results, J.P. Morgan also increased the target price for PAAS from $16 to $17.

BMO Capital Markets, on the other hand, downgraded PAAS to “market perform” from “outperform.” The broker believes most of the medium-term growth is priced in for the company.

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