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Why Analysts Love First Majestic Silver the Most

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First Majestic Silver

While First Majestic Silver (AG) has seen negative returns year-to-date (or YTD), it has outperformed the Silver Miners (SIL) Index. Its stock has returned -17.8%. However, the majority of these losses came in August. During the month, AG’s stock fell 16.3%. Before that, it had fallen just 1.5% in 2018.

After AG released its Q2 2018 earnings in August, the stock fell 15.3%. Lower production and high costs along with impairments were to blame for the poor stock performance.

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Most “buy” ratings

AG has the highest percentage of “buy” ratings among the silver miners we’re discussing with 100% of analysts recommending a “buy” for the stock. At the end of November 2017, only 50% of analysts were recommending a “buy.” AG’s continued turnaround and better prospects are likely the reasons analysts are more optimistic.

Coeur Mining (CDE), Hecla Mining (HL), and Pan American Silver (PAAS) have “buy” ratings from 88%, 42%, and 60% analysts, respectively.

First Majestic Silver’s estimates

Analysts expect First Majestic Silver to report revenue of $326 million in 2018, which implies a YoY (year-over-year) rise of 29%. Analysts’ estimate for 2019 implies another rise of 39% YoY. Investors should note that the expected growth rate in revenues for AG has come down significantly, which is mostly due to weaker silver prices and the company’s higher costs.

First Majestic Silver’s EBITDA (earnings before interest, tax, depreciation, and amortization) is expected to fall 21.5% in 2018, according to analysts’ estimates. Its earnings margin is expected to expand to 40.7% in 2019 and 48.7% in 2020.

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