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How Analysts Rate Intermediate Gold Miners after 3Q16

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Market sentiment

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

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Gold miners’ ratings

Currently, 11 analysts are covering IAMGOLD (IAG). Of these, six analysts have issued “buy” ratings, three have issued “hold” ratings, and two have issued “sell” ratings on the stock. Analysts have increased their target prices for IAG by an average of 187% since the start of 2016. The increase was in response to higher gold prices and the stock’s high leverage to gold prices.

Although the company has a high leverage to gold prices due to its high operational costs, analysts probably aren’t very positive on the company’s fundamentals yet.

About 38% of analysts covering Agnico-Eagle Mines (AEM) have given it “buy” recommendations. About 50% of analysts have given it “hold” recommendations, and only 13% have given it “sell” recommendations. The stock’s consensus target price now stands at $53.20.

The majority of analysts, at 69%, have given a “hold” rating to New Gold (NGD) with only 8% “sell ratings. Its target price of $5.0 implies a potential upside of 58%.

Among intermediate gold miners, Eldorado Gold (EGO) is analysts’ favorite with 77% “buy” ratings and 23% “hold” ratings. This implies no “sell” ratings on the stock. Recently, analysts have started turning bullish on Eldorado Gold. Its fundamentals have started turning around for the better, and analysts expect its stock to catch up with peers. As we’ve seen previously in this series, Eldorado Gold has underperformed its peers year-to-date.

In the next part of this series, we’ll look at the earnings estimates for these miners.

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