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How Have Ratings for Senior Gold Miners Changed Recently?

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Newmont Mining’s ratings changes

Standpoint Research upgraded Newmont Mining (NEM) from a “hold” to a “buy” on December 29, 2016. Credit Suisse (CS) cut its target price for the company from $53 to $51 while maintaining its “outperform” rating on December 20, 2016.

The broker believes that the company’s project pipeline is better than expected. Newmont is its top pick, mainly due to the company’s “operational consistency, attractive relative valuation and strong track record of adding to its net asset value.”

Citigroup (C) lowered its recommendation for Newmont from “buy” to “neutral” and cut its target price from $44 to $34 on December 5, 2016.

More recently, on January 10, 2017, Barclays and Jefferies both raised their target prices for Newmont.

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Barrick’s downgrade

On December 21, 2016, TD Securities downgraded Barrick Gold (ABX) from “buy” to “hold.” (ABX)+to+Hold/12362528.html" target="_blank">The analyst stated, “We expect that debt-reduction will still be a priority for management, but demonstrating to investors that the slow erosion in annual production can be stabilized and reversed will also be a key focus. Based on our forecasts, we model gold production declining ~23% by 2021 from 2017. Over that timeframe, Barrick has the weakest production profile among our forecasts for the senior North American gold producers.”

Goldcorp and Kinross

TD Securities upgraded Goldcorp (GG) to a “buy” from a “hold.” The firm believes that after several years of disappointment, there’s an upside potential for Goldcorp.

While noting that Goldcorp stock has underperformed, analyst Greg Barnes noted, “The relative underperformance (+5.7% YTD) is partly due to successful turnaround strategies that have played-out over the past two years at Barrick (+89% YTD) and Newmont (+73% YTD). In our view, the underperformance was also due to investor frustration as they realized that an operational turnaround would take longer than expected. We believe that the turnaround strategies at Barrick and Newmont are now largely complete, whereas at Goldcorp we see the potential for investors to re-engage after several years of disappointment.”

Goldcorp is also Desjardins’s top pick among gold mining stocks.

On January 11, 2017, CIBC cut its target price for Kinross Gold (KGC) from $5.25 to $4.75. Jefferies also cut its target price for the company to $3.50.

Citi downgraded Kinross from “neutral” to “sell” on December 5, 2016.

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