Hecla Mining: The Word on Wall Street



Hecla Mining’s consensus rating

According to consensus estimates compiled by Thomson Reuters, ten analysts are covering Hecla Mining (HL). Plus, 70% of analysts gave a “hold” recommendation on the stock, and 10% gave a “buy” recommendation on the stock. HL’s ratings haven’t changed much in the last year.

The target price for Hecla Mining is $6.55, which implies a potential upside of 19%. The target price has risen 120% in the last year, as the stock’s price has gained 75% in the same period.

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Hecla Mining’s revenue estimate

According to data compiled by Thomson Reuters, analysts expect Hecla Mining to deliver revenues of $675 million for 2017, which is an increase of 4.5% year-over-year. This is almost in line with the company’s guided production growth of 4% for 2017.

EBITDA estimates

Analysts are currently forecasting EBITDA[1. earnings before interest, tax, depreciation, and amortization] of $268 million for 2017, which implies growth of 7.5% year-over-year for Hecla Mining.

While precious metal prices (DBP) have risen, Hecla Mining’s (HL) costs shouldn’t increase at the same pace, which leads to higher margins. In 2015, Hecla Mining’s EBITDA margin was 26.4%, whereas the margin expanded rapidly to 37% in 2016. Analysts are forecasting stable margins in 2017.

An expansion in margins is further expected in 2018, mainly due to the strength of Hecla Mining’s cost-cutting efforts as well as improved precious metal price forecasts going forward.

However, Hecla Mining isn’t unique as far as cost-cutting efforts are concerned. Other gold and silver miners such as Iamgold (IAG), AngloGold Ashanti (AU), and First Majestic Silver (AG) are also making efforts to reduce their costs.


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