Could Analysts Change Their Minds on Eldorado Gold?



Deteriorating analyst sentiment

Eldorado Gold (EGO) stock has seen rapidly deteriorating analyst sentiments in the past year. Currently, only 17% of the 13 Wall Street analysts covering the stock rate it a “buy.” That stands in sharp contrast to the ~50% “buy” ratings it had almost a year ago. About 58% of the analysts are rating it a “sell.”

Eldorado stock has lost 38.4% of its value year-to-date as of September 24. It fell 56% in 2017. The stock suffered a great deal in 2017 due to its standoff with the Greek government and some technical issues at its mines in Turkey.

In contrast, its peers (GDX) (JNUG) Agnico Eagle Mines (AEM), Yamana Gold (AUY), and Newmont Mining (NEM) have fallen 25.6%, 19.6%, and 17.1%, respectively.

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Mine issues continue

In May, a positive development unfolded for the stock when Greece’s government announced that it was aiming to resolve a long-standing standoff with Eldorado Gold about its development work. However, the company still hasn’t received any permits to start its Skouries project, which has been negatively impacting the stock. The future of its Kisladag mine in Turkey remains uncertain. There’s no clarity around the development options for the mine, which will continue to weigh down the stock.

Analysts are waiting on the sidelines

There will likely be several rounds of negotiations before Eldorado’s Skouries project in Greece gets the green light. Analysts are also waiting for a solid plan for developing the Kisladag mine. There are also issues surrounding the funding for these mines. In the meantime, there could be execution and funding issues. Analysts are currently standing on the sidelines, with 58% recommending a “hold” and waiting for more positive developments.


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