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Keeping a Tab on Key Rating Changes for Senior Gold Miners

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Barrick removed from conviction list

Citigroup (C) reiterated its “buy” rating on Barrick Gold (ABX) on October 17, 2016. RBC Capital Markets believes that the majors will lead the September quarter results. It said, “Given the year-to-date cost containment, we expect the North American precious metal producers to deliver strong Q3 financial results.” RBC has a “sector perform” rating for Barrick Gold.

Goldman Sachs (GS), on the other hand, removed Barrick from its conviction “buy” list on October 5, 2016. A Barron’s report quoted Goldman Sachs as saying, “There has been a visible acceleration in macro headwinds recently, negatively impacting gold prices.”

Goldman Sachs went on to say that the timing of adding Barrick to its conviction “buy” list was probably not right. It still has a “buy” rating on the stock.

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Weighing in on Goldcorp

National Bank Financial expects Goldcorp (GG) to post EPS (earnings per share) of $0.05 for 3Q16, which is lower than its previous forecast of $0.07. The firm has a target price of $18.40 with an “outperform” rating for the stock.

Jefferies also lowered its EPS estimate for Goldcorp from $0.19 to $0.17 on October 14, 2016. Currently, the firm has a “hold” rating for the stock with a target price of $15.

What’s impacting Newmont and Kinross?

On October 17, 2016, Barclays upgraded Newmont Mining (NEM) from “equal weight” to “overweight.” Barclays analyst Matthew Korn said, “We expect movements in gold prices through December to be closely tied to Fed-watching but still like the prospective catalysts ahead for OceanaGold (OGC.TO) and Newmont Mining.”

National Bank lowered its EPS estimate for Kinross Gold (KGC) from $0.09 to -$0.01 for fiscal 2016. It has a target price of $5.07 for the stock with a “sector perform” rating.

Analysts are abstaining from upgrading or turning more positive on highly leveraged stocks such as Kinross Gold. In the event of a gold price (GLD) pullback, these stocks will be the first ones to fall and most likely with great intensity.

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