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Which Gold Miners Could Surprise on the Upside in 1Q17?

Anuradha Garg - Author
By

Aug. 18 2020, Updated 5:14 a.m. ET

Analysts’ forecasts

Wall Street analysts’ forecasts for gold mining companies’ (GDX) revenues can give us a good idea about their views on gold prices (GLD) going forward. 

In this part of the series, we’ll assess analysts’ revenue expectations for gold companies in 1Q17 and beyond.

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Analysts’ revenue expectations

Wall Street analysts expect revenue of $2.2 billion for Barrick Gold (ABX) in 1Q17, 6.4% less than what it earned in 4Q16. Analysts forecast a slight rise of 1.3% in Barrick’s revenue YoY (year-over-year) in 2017.

Barrick is guiding for 4.2% growth in production in 2017 at the mid-point of its guidance. This implies that analysts are either factoring in production growth that’s lower than the mid-point or lower gold prices.

Analysts’ revenue estimate for Newmont Mining (NEM) is $1.7 billion for 1Q17, implying a sequential fall of 2.6%. Its revenue estimate for 2017 is $7.1 billion, which shows a rise of 5.8% YoY. The rise is mainly expected due to accelerated production, as a full year of production from its new projects, including Merian and Long Canyon, will be factored in.

Goldcorp’s (GG) revenue estimates for 1Q17 imply a sequential fall of 4.8% to $855 million. The estimate also implies a fall of 3.7% YoY.

Kinross, Agnico Eagle, and Yamana

Kinross Gold’s (KGC) revenue estimates imply a sequential fall of 12.8% in 1Q17. Even for 2017, analysts expect to see a 6.8% fall in revenue compared to 2016, likely due to the company’s anticipated fall in production. This expectation has resulted from the suspension of mining activities at Maricunga and anticipated lower grades at its Russian operations.

Agnico Eagle Mines’ (AEM) revenue estimate for 1Q17 is $512 million, 2.5% higher than its revenue of $500 million in 4Q16. Yamana Gold’s (AUY) 1Q17 revenue estimate implies a YoY fall of 1.2% and a sequential fall of 12.3%. Continue to the next article for a discussion on these companies’ earnings drivers.

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