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What’s Affecting Ratings for Silver Miners as We Enter 2017?

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Performances of silver miners 

Precious metal miners with substantial exposure to silver have performed quite well in 2016. Silver miners are essentially a leveraged play on silver, and silver outperformed gold in 2016. While silver prices rose 17.0% in 2016, gold prices rose 8.5%. Silver companies have returned far more, depending on their leverages.

Of these companies, Coeur Mining (CDE) has outperformed its peers, rising an impressive 268.0%. Hecla Mining (HL) has risen 177.0%. First Majestic Silver (AG), Pan American Silver (PAAS), and Tahoe Resources (TAHO) have risen 123.0%, 123.0%, and 6.6%, respectively.

Coeur and Hecla are highly leveraged operationally compared to their closest peers. They’re also high-cost operators, leading to disproportionate gains. To brush up on Coeur, be sure to read Can Coeur Mining Continue to Outperform Peers in 2017?

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Ratings for silver miners

The market consensus rating for Coeur Mining (CDE) is a “buy” from 60.0% of analysts. Of the ten analysts covering the company, 40.0% have given Coeur Mining a “hold” recommendation. There are no “sell” recommendations for the stock.

The average target price for CDE is $12.80 compared to its current market price of $11.65, which implies a potential downside of 10.0%.

About 60.0% of analysts have given Hecla Mining a “hold” recommendation, and 20.0% have given it a “buy.” At the start of 2016, Hecla had a “buy” rating from 30.0% of analysts.

For First Majestic Silver (AG), analyst ratings are split between “hold” and “buy,” with 50.0% recommending each. At the start of the year, the company didn’t have any “sell” ratings, and 75.0% of its ratings were “hold.”

About 36.0% of analysts have “hold” ratings on Pan American Silver (PAAS), while 64.0% have “buy” ratings, and there are no “sell” ratings. At the start of 2016, only 17.0% of analysts had given PAAS a “buy” rating.

Analysts’ favorite

Among all the primary silver producers (SIL), Tahoe Resources (TAHO) seems to be the most-liked silver miner. It has 87.0% “buy” ratings and 13.0% “hold” ratings. Its current target price is $19, which implies an upside potential of 60.0%. Its consensus target price has seen an upward revision of 17.0% in the last year.

For an in-depth review of silver miners’ ratings, see Silver Miners in 2017: Which Offer the Most Value?

In the next part of this series, we’ll see how analysts’ recommendations for silver miners have changed recently.

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