Why Analysts Are Optimistic about Coeur Mining



Market sentiment for Coeur Mining

On a YTD basis, Coeur Mining (CDE) has almost matched the performance of the Silver Miners Index (SIL) with losses of 27.1%. It has, however, underperformed silver prices (SLV), which have fallen 17.3%.

CDE is trying to lower its costs, which are expected to be higher in 2018. Higher costs are mainly due to transitions at some of its mines. Peers Hecla Mining (HL), Pan American Silver (PAAS), and Newmont Mining (NEM) are also trying to increase production at the lowest possible cost.

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Analysts’ recommendations

Of the companies we’re covering in this series, Coeur Mining has the second-highest percentage of “buy” recommendations at 88%. Another 12% of analysts are recommending a “hold” for the stock, and there aren’t any “sell” ratings. CDE’s upside potential based on its current target price of $9.6 is 75%.

Analysts’ estimates

According to consensus expectations, Coeur Mining is expected to have revenue of $708 million in 2018, implying flat growth YoY (year-over-year). The slightly higher production growth might have been offset by expectations of lower precious metal prices. Analysts expect CDE’s revenues to grow significantly by 11.0% YoY, mainly due to the start of its growth projects.

While Coeur Mining’s revenue is expected to be flat in 2018, its EBITDA is expected to fall 1.8% YoY, which is mostly due to an expected rise in costs. The company has guided for higher costs in 2018 due to its mine transitions.

Beyond 2018, analysts are expecting Coeur’s costs to fall as its Wharf mine enters the high-grade area and Palmarejo’s production ramps up. Analysts expect a margin of 30.9% for CDE in 2019 and 30.6% in 2020 compared to 26.4% in 2018.


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