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Goldcorp’s Bright Outlook Pushes It onto Analysts’ Radar

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Nov. 20 2020, Updated 9:52 p.m. ET

Analyst ratings for Goldcorp

Goldcorp is one of the senior gold producers based in Canada, with operations are spread across Canada, the US, Mexico, Central America, and South America. Goldcorp’s goals center on developing reserves and operating in safe jurisdictions across the Americas. To read more about Goldcorp, please refer to An investors’ guide to Goldcorp Inc.

Of the 20 Wall Street analysts covering the stock, 45% recommended a “buy,” 50% recommended a “hold,” and 5% recommended a “sell” on the stock. The implied return for the company, derived from its current target price of $16.80, is 29.4%. Barrick Gold (ABX) and Newmont Mining (NEM) have upside potential figures of 24.4% and 8.6%, respectively.

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Returns for Goldcorp

Goldcorp stock has lost 4.7% year-to-date (or YTD) through the end of September, underperforming its close peers (GDX). It is the only senior miner to have a negative price performance YTD. Kinross Gold (KGC), Barrick Gold, and Newmont Mining have gained 36.3%, 0.7%, and 10.1%, respectively.

Goldcorp’s operational performance has remained weak in 2017 and below market expectations. The company reset expectations after its management change, which disappointed the markets.

However, the future vision of the company remains quite strong, as it is following a five-year 20/20/20 plan. This plan aims to increase production and reserves by 20% each and reducing the unit costs by 20% in the next five years.

Please read Goldcorp Stock Fell despite Positive 2Q17 Results for a look at Goldcorp’s long-term guidance and what it means for its outlook.

Valuations

Goldcorp is trading at a forward EV-to-EBITDA[1. enterprise value to earnings before interest, tax, depreciation, and amortization] multiple of ~9.8x, which is a premium of 31% to its senior miner peers. Although the company has underperformed its peers in 2017, its long-term outlook remains strong given its strong growth vision and the robust project pipeline.

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