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Why IAMGOLD Has Climbed the Ranks among Analysts

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Analysts’ ratings for IAG

Currently, IAMGOLD (IAG) is just behind Wheaton Precious Metals in terms of “buy” ratings. It has “buy” recommendations from 75% of the 12 analysts covering it, while the remaining 25% have recommended “holds” on the stock.

There has been a significant turnaround in analysts’ sentiments for the stock. Until December 2017, only 54% of analysts were recommending “buys” on the stock. Its target price of $7.8 implies an upside of 33.6%.

Reasons for improved sentiments

IAG’s Q4 2017 and Q1 2018 operating results were quite impressive. In its latest quarterly results, the company thoroughly beat the consensus top and bottom line expectations due to record gold production at its Essakane and Westwood mines. Moreover, it has multiple organic growth opportunities, and it’s pursuing expansion opportunities at existing deposits. The company expects initial resource estimates from some of these projects in the short term.

IAG is only one of the few intermediate gold miners to have returned positive stock gains YTD (year-to-date). Until June 14, IAG has returned 2.1% compared to the -18.2%, -34.7%, and 1.0% returned by its peers Eldorado Gold (EGO), New Gold (NGD), and Agnico Eagle Mines (AEM), respectively. IAG has also outperformed the VanEck Vectors Junior Gold Miners ETF (GDXJ), which has returned -2.7% in the same period.

IAMGOLD’s robust operational performance in 2018 and its strong project execution have kept its stock steady this year after its outperformance in 2017.

Future catalysts

Future catalysts for IAG include Essakane’s pre-feasibility study results, which are due in mid-2018 and have the potential to add three to five years to the mine’s life. The company is doing further exploration at Brokolonko, which should confirm mineralization and advance it to the resource stage. The feasibility study for Côté Gold is expected to be completed by the first half of 2019, and production is expected to start by 2021.

These catalysts could go a long way toward further rerating IAG.

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