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Which Intermediate Gold Stock Do Analysts Favor Now?

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Nov. 20 2020, Updated 3:37 p.m. ET

Performances of intermediate gold miners

Intermediate gold miners’ (RING) (GDXJ) stock performances were better than those of senior gold miners in 1H17. Intermediate miners rose 5.7%, compared with the benchmark’s (GDX) rise of 5.5%.

Among these miners, IAMGOLD (IAG) substantially outperformed its peers with a 1H17 rise of 34%. Agnico Eagle Mines (AEM) was the only other intermediate miner with a positive stock gain, returning 7.4% in 1H17. New Gold (NGD), Yamana Gold (AUY), and Eldorado Gold (EGO) fell 9.1%, 13.5%, and 18.0%, respectively.

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Agnico is analysts’ favorite

Agnico Eagle Mines now has the highest percentage of “buy” ratings at 56%. Another 33% recommend a “hold” for the stock. While analysts have always been positive on the company’s consistent operational performance and management execution, its relatively higher valuation is keeping some analysts from being more positive about the stock.

Half of the analysts rating Yamana Gold are recommending a “hold” for the stock. The company’s operational performance and outlook have disappointed analysts, resulting in a downgrade of its earnings estimates. There isn’t any positive catalyst in terms of production growth or cost improvement for analysts to look forward to.

New Gold and IAMGOLD

The majority of ratings for New Gold, on the other hand, are “holds” at 69%. Most likely, analysts are waiting on the sidelines for its Rainy River project to start successfully before turning positive on the stock. The company announced cost overruns twice for this project in five months. Any positive commentary on this during its 2Q17 results would be positive for the stock.

IAMGOLD has “buy” ratings from 46.0% of analysts. The company has handsomely outperformed its peers year-to-date on the back of the strength of its recent positive project announcements. Investors should note that IAG had “buy” ratings from only 21% of the analysts one year ago.

In the next part, we’ll look at changes in analysts’ recommendations for intermediate gold miners.

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