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How Analysts Rate Senior Gold Miners after Their 1Q17 Announcements


Dec. 4 2020, Updated 10:53 a.m. ET

Market sentiment

So far in this series, we’ve analyzed the key operating and financial metrics for gold miners. Now it’s time to see the market sentiment for these companies. In this part of our gold series, we’ll look at analysts’ recommendations, target prices, and potential upsides for gold miners.

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Gold miner ratings

Among the senior gold miners (GDX), analysts are the most bullish on Newmont Mining (NEM), giving it 53% “buy” and 42% “hold” ratings. Along with higher gold prices, a reduction in Newmont Mining’s debt in 2016 encouraged investors to turn positive on the stock.

Goldcorp (GG) comes second, with 48% of analysts recommending a “buy” for the stock. Along with gold prices, analysts’ bullishness on gold stocks has corrected steeply in the past year. Goldcorp’s target price has seen a correction of 12% in the last six months.

Of the 25 analysts covering the stock, Barrick Gold (ABX) has “buy” ratings from 44% of the analysts and “hold” ratings from 48% of the analysts. Barrick’s target price implies an upside of 33% based on its current price of $16.26. Its target price has seen an upward revision of 36% in the past year.

Analysts’ opinions are tilted toward a “hold” for Kinross Gold (KGC), with “hold” ratings from 60% of the analysts. Its target price is $4.46, which represents an upside of 17% based on its current market price.

Revision in target prices

Newmont Mining has seen an upward target price revision of 19% in the last year. This is mainly due to its improvement in financial leverage and overall higher gold prices. Goldcorp, on the other hand, has seen a downward revision in its target price, and it has declined 6% in the past year.

Investors who don’t want to invest in the stock of individual companies can get exposure to gold miners through ETFs like the VanEck Vectors Gold Miners ETF (GDX) or the VanEck Vectors Junior Gold Miners ETF (GDXJ). These ETFs invest in senior and intermediate gold miners.

Newmont Mining makes up 6.9% of GDX’s portfolio. Notably, the SPDR Gold Shares ETF (GLD) provides exposure to spot gold prices.


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