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Factors Impacting Analysts’ Earnings Estimates for Gold Miners

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Analysts’ forecasts

Along with analyst ratings, it is also important to look at the Wall Street analysts’ forecasts for gold mining companies’ (GDX) (JNUG) top and bottom lines. These forecasts can be valuable in assessing their views on gold prices (GLD) going forward. In this part of the series, we’ll assess analysts’ revenue expectations for gold companies in 3Q17 and beyond.

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Analysts’ revenue expectations

Wall Street analysts are expecting revenues of ~$2.1 billion for Barrick Gold (ABX) in 3Q17, which implies a decline of 3% compared to 2Q17. The company stated that it expects its 2H17 production to be fourth quarter–weighted. This could be a significant factor in analysts’ expectations of a decline in 3Q17. 

ABX’s revenues for 2017 also imply a 2.4% year-over-year (or YoY) decline, which is higher than what it earned in 2Q16. Analysts forecast a decline of 2.5% in ABX’s revenues YoY in fiscal 2017, which is in line with the company’s guidance of an expected fall in production YoY.

Wall Street is expecting Newmont Mining (NEM) to generate ~$1.9 billion in revenues for 3Q17, implying a sequential decline of 1.1%. Analysts are estimating revenues of $7.3 billion for NEM for 2017, which implies a rise of 8.0% YoY. The rise is mainly expected due to higher production, as analysts factor in a full year of production from its new projects, including Merian and Long Canyon.

Analysts expect a sequential increase of 2.8% in revenues for Goldcorp (GG) in 2Q17. The company has guided for a fairly flat range of 625,000–650,000 ounces per quarter in 2H17. On a YoY basis in 2017, analysts are estimating a decline of 2%. This YoY fall is mainly attributable to the decline in its production, which is already guided by the company.

Kinross Gold

Kinross Gold’s (KGC) revenue estimate for 3Q17 is $821 million, implying a sequential fall of 5.5% and a yearly fall of 9.8%. The revenues for fiscal 2017 also imply a fall of 4.4% YoY. This forecast is in line with the company’s guidance of declining revenues in 2017 due to the suspension of operations at Maricunga and expected lower grades at its Russian operations.

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