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How Analyst Recommendations Changed for Gold Miners in 1Q17

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Newmont Mining’s ratings changes

RBC Capital Markets downgraded Newmont from “outperform” to “sector perform” on March 16, 2017. It also cut its target price from $43 to $38.

On March 3, 2017, Credit Suisse (CS) cut its target price for Newmont Mining (NEM) from $51 to $47. The firm, however, maintained its “outperform” rating. Its thesis as reported by Barron’s blog is as follows: “Modelling Newmont’s Feb. 21st guidance, our TP declines to $47 from $51 due to a 4% lower NAV to $24.27/sh from $25.39/sh and 13% lower 2017 OpCFa to $2.58/sh from $2.96/sh.”

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Barrick’s upgrade

On March 16, 2017, RBC Capital Markets upgraded Barrick Gold (ABX) from “sector perform” to “outperform.” According to Barron’s blog, the rationale for the more optimistic outlook is as follows: “Year-end updates have raised our financial estimates and target price, and Barrick’s relative valuation supports an upgrade from Sector Perform to Outperform. With our improved production and cost outlook we expect Barrick’s shares to benefit from strong FCF generation in 2017 and 2018, placing the company in a solid position to pay down debt and advance its organic growth projects.”

Goldcorp and Kinross

On March 16, 2017, RBC Capital Markets upgraded Goldcorp (GG) from “underperform” to “sector perform.” The firm believes that the pullback in Goldcorp’s stock offers attractive returns.

Kinross hasn’t seen any rating changes in 1Q17. 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.

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