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Could Kinross Gold Climb the Analysts’ Rankings?

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Analyst ratings for Kinross Gold

Kinross Gold (KGC) is a senior gold miner (SGDM) (GDX) based in Canada. It has operations in Canada, the US, Chile, Mauritania, Ghana, Brazil, and Russia. To read more about Kinross Gold, have a look at An investors’ Guide to Kinross Gold Corp.

Kinross Gold stock is covered by 18 Wall Street analysts. Of these analysts, 44% rate the stock as a “buy” while 56% rate it as a “hold.” There are no “sell” ratings for the stock.

The company’s target price implies a potential upside of 22.6% based on the consensus target price of $5.20. The analysts have upwardly revised Kinross Gold’s target price by 16% in 2017 year-to-date (or YTD). This revision is mostly due to the strength of Kinross Gold’s stock price in 2017.

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Returns for Kinross Gold

Kinross Gold has returned 36.3% in 2017 through the end of September. KGC stock has strongly outperformed its peers in 2017. Its close peers Barrick Gold (ABX), Goldcorp (GG), Newmont Mining (NEM), and Agnico Eagle Mines (AEM) have returned 0.7%, -4.7%, 10.1%, and 7.6%, respectively, in the same period.

Kinross has consistently outperformed the market expectations on its results as well as project execution in 2017, which were the major reasons for its YTD outperformance. For more information about its 2Q17 results and outlook, please read Can Kinross Gold’s 2Q17 Results Sustain Its Price Momentum? Investors interested in knowing more about Kinross’s mine expansion plans can read Kinross Gold’s Mine Expansion Plans: All You Need to Know.

Valuations

Kinross Gold stock is trading at a forward EV-to-EBITDA[1. enterprise value to earnings before interest, tax, depreciation, and amortization] multiple of ~5.2x. This implies a discount of 30.6% to its peers’ average multiple.

KGC’s multiple has risen ~25% in 2017 so far. Its strong operational performance and project execution led to this rerating. A timely execution on its latest growth projects could lead to a further rerating of the stock, which could lead to a diminishing of its valuation gap versus its peers.

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