Why Coeur Mining Has Climbed the Ranks among Analysts



Market sentiment for Coeur Mining

Year-to-date, Coeur Mining (CDE) has almost matched the performance of the Silver Miners Index (SIL) with losses of 25%. It has, however, underperformed silver prices (SLV), which have fallen 16%.

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. Its 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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Analyst recommendations

Among the major precious metal mining companies, Coeur Mining has the second-highest percentage of “buy” recommendations at 88%. The other 12% are recommending a “hold,” and there are no “sell” ratings. CDE’s upside potential based on its current target price of $9.60 is 75%.

Until April, CDE had “buy” ratings from only 56% of the analysts covering the stock. Canaccord Genuity and Roth Capital upgraded the stock in 2018. Roth Capital’s analyst cited a strong second quarter at the Palmarejo mine as the reason for the upgrade.

Analyst 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% 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.

You can also read How Do Analysts Rate Silver Miners? for more on silver miners’ ratings.


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