5 Jul

Analysts’ Sentiments: Gauging Gold Miners’ Upside Potentials

WRITTEN BY Anuradha Garg

Are sentiments improving for Newmont Mining and Goldcorp?

Among senior gold miners, analysts are the most bullish on Goldcorp (GG), assigning it 70% “buy” and 5% “sell” ratings. Analysts’ sentiments toward GG stock have been improving. At the end of December 2017, it had “buy” ratings from 60% of analysts.

Since the start of 2018, Goldcorp’s major upgrades have come from Credit Suisse, TD Securities, and Canaccord Genuity. It hasn’t seen any downgrades year-to-date.

Analysts’ Sentiments: Gauging Gold Miners’ Upside Potentials

After underperforming its peers in 2017, GG has seen a turnaround of sorts in 2018. While investors were slightly disappointed when GG reset expectations for production and costs after a management change at the start of 2017, things have been changing lately. The company’s latest results show that it has reworked its vision to improve production, reserves, and costs by 20% each by 2021. For more details, read Can Goldcorp Stock Keep Up Its Performance in 2018?

Of the analysts covering Newmont Mining (NEM), 56% recommend “buys.” A year ago, 45.0% recommended “buys” on its stock. Along with higher gold prices, a reduction in Newmont’s debt in 2016 made investors positive on its stock.

Are Barrick and Kinross losing favor?

Both Barrick Gold (ABX) and Kinross Gold (KGC) have been losing favor with analysts lately. As we discussed earlier in this series, Barrick’s mine issues are ongoing, while Kinross’s most ambitious expansion, the Tasiast expansion, has fallen under scrutiny.

Barrick has “buys” from only 18% of the analysts covering it, the lowest percentage of “buy” recommendations among senior mining stocks (GDX). Meanwhile, 68% of analysts have recommended “holds” on Barrick, and 14% have recommended “sells.”

Of the analysts covering Kinross Gold (KGC), 44% have recommended “buys,” and 56% have recommended “holds” on its stock.

For an in-depth review of analysts’ sentiments toward gold miners, read Five Gold Stocks Analysts Love—and Five They Don’t. In the next article, we’ll take a closer look at the reasons for analysts’ recent revisions in the first half of 2018.

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