How Analysts Expect Gold Miners’ Earnings to Progress



Analysts’ earnings expectations

Now that we’ve considered analysts’ revenue estimates for the senior gold miners under review (GDX) in this series, let’s take a look at analysts’ EBITDA estimates.

Along with the expected fall in Barrick Gold’s (ABX) 2018 revenue, analysts expect a fall in its EBITDA. The expected fall in its EBITDA, however, is much larger. ABX’s EBITDA is expected to fall 19.7% YoY (year-over-year) to $3.2 billion most likely due to higher estimates for costs, in line with the actual cost increases recorded by the company.

Newmont Mining’s (NEM) EBITDA is expected to fall 9.0% YoY to $2.4 billion in 2018. As we learned in the previous part of this series, Newmont expects a fall in production and a YoY rise in costs in 2018, driving its EBITDA to fall more quickly than its revenue.

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Kinross Gold and Goldcorp

In contrast to other miners, analysts expect higher YoY EBITDA for Kinross Gold (KGC) in 2018. Its EBITDA is expected to rise 10.3% to $1.2 billion. Analysts bumped up their estimates after the company’s first-quarter results due to its better-than-expected cost performance. It’s expected to report a margin of 36.6% in 2018 compared to 32.8% in 2017.

Analysts also expect a 3.6% YoY increase in Goldcorp’s (GG) EBITDA in 2018. This expectation is in line with the company’s expected rise in revenue.


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