What’s up with Kinross’s Upgrades?


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

Analysts’ recommendations

For Kinross Gold (KGC), the analyst recommendations are equally divided between “buy” and “hold” at 44% each, while 11% of the analysts recommend a “hold” for the stock. Its target price of $4.57 implies an upside of 11.7%, according to Thomson Reuters.

Peers (GDX) Barrick Gold (ABX), IAMGOLD (IAG), Yamana Gold (AUY), and Hecla Mining (HL) also have wide ranges of target prices.

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Recent rating changes

BMO Capital Markets upgraded Kinross from “market perform” to “buy” on May 29, 2017. It also enhanced its target price from $3.75 to $5.00. BMO analyst Andrew Kaip mentioned that the company’s steady stage of execution and its current relative valuation are both attractive. BMO’s upgrade was prompted by Kinross’s advancing brownfield opportunities.

Bank of America upgraded Kinross’s stock from a “neutral” to a “buy” on May 23, 2017.

Another key upgrade

Another upgrade for Kinross in May 2017, came from TD Securities, which raised the stock from a “buy’ rating to an “action list buy” rating on May 10, 2017. TD Securities has a price target of 7.5 Canadian dollars for the stock and referred to Kinross as an “underappreciated senior gold producer.”

This latter upgrade was due to several company-specific catalysts that are expected to materialize in the next six–12 months. These catalysts include:

  • the feasibility and development decision on the Tasiast mine
  • the mine life extension project at Round Mountain
  • the details of the Fort Knox mine expansion in Alaska
  • the expected doubling of production at Bald Mountain
  • the planned start of Phase I of Tasiast in 1H18

TD’s analyst also thinks that Kinross’s valuation is attractive. Kinross is now trading at the lowest EV-to-EBITDA (earnings before interest, tax, depreciation, and amortization) multiple among peers (JNUG) (GDX) Barrick Gold (ABX), Agnico Eagle Mines (AEM), Goldcorp (GG), and Newmont Mining (NEM).

On May 3, 2017, CIBC upgraded Kinross from a “neutral” rating to an “outperform” rating. CIBC has a price target of 4.75 Canadian dollars for the stock.


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