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Why Goldcorp Is on Many Analysts’ Wish Lists

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Analysts’ ratings for Goldcorp

Currently, 20 Wall Street analysts are tracking Goldcorp (GG) stock. About 70% of them are recommending a “buy,” 25% are recommending a “hold,” and 5% are recommending a “sell.” Its current target price of $16.90 implies a potential upside of 58% based on its current market price.

Analysts’ sentiment for GG stock has been improving. At the end of December 2017, the stock had “buy” ratings from 60% of analysts compared to 70% currently. Since the start of 2018, Goldcorp’s major upgrades have come from Credit Suisse, TD Securities, and Canaccord Genuity.

Goldcorp (GG) has operations across Canada, the United States, Mexico, Central America, and South America. You can learn more about Goldcorp in Market Realist’s series An Investors’ Guide to Goldcorp.

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Goldcorp’s outperformance

Goldcorp (GG) is one of the major stocks with the smallest negative returns YTD (year-to-date). As of September 24, it has returned -16.7% in contrast to Barrick Gold’s (ABX) return of -23.7%, Kinross Gold’s (KGC) return of -31,9%, and Newmont Mining’s (NEM) return of -17.1%. The VanEck Vectors Gold Miners ETF (GDX) has fallen 19.1% in the same period.

Goldcorp’s vision

Goldcorp’s second-quarter earnings fell short of market expectations. The company reported adjusted EPS of $0.02, which missed the consensus estimate by $0.05. Its revenues of $793 million missed the analyst estimate by ~9%.

While its latest results disappointed investors, its production, costs, and reserves are expected to improve significantly, backed by a solid project pipeline, which is progressing on schedule and on budget. Its balance sheet is also in deleveraging mode. Due to its lower capital intensity going forward, it’s expected to generate significant free cash flow.

For more details, read the Market Realist series Can Goldcorp Stock Keep Up Its Performance in 2018?

Also be sure to read Which Gold Miners Could Show Upside Potential after Q2 2018? to learn more about the strengths and weaknesses of Goldcorp and its senior gold mining peers in their second-quarter earnings.

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