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Analysts Are Concerned about Kinross Gold’s Geopolitical Issues

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Analysts’ recommendations

Of the analysts covering Kinross Gold (KGC), 42.0% recommended a “buy” and 58.0% recommended a “hold.” Ratings for the stock haven’t changed much in recent months. Its target price of $4.56 suggests a potential upside of 63.0% based on its current market price.

In 2017, Kinross significantly outperformed its peers (GDX)(JNUG), returning 39.0%. Newmont Mining (NEM), Agnico Eagle Mines (AEM), and Barrick Gold (ABX) returned 10.1%, 10.0%, and -9.4%, respectively.

Kinross stock performed strongly thanks to its solid operating performance in 2017. In 2018, however, the situation has reversed. On October 11, the stock had fallen 31.5% year-to-date. Its second-quarter earnings were in line with analysts’ expectations while its revenues were a miss. The company expects its production to be lower in 2018 than in 2017.

Recent rating changes

Kinross Gold stock has seen three major downgrades in 2018. On August 20, RBC Capital downgraded its stock from “outperform” to “sector perform.”

As reported by The Fly, RBC analyst Stephen Walker believes that positive catalysts for the stock, including organic growth opportunities, remain. However, the potential expansion has been priced into the stock. He also cited increased tax uncertainty and the royalty payment outlook for its assets in Mauritania and Russia.

On July 14, TD Securities downgraded KGC stock to “buy” from “action list buy.” BMO Capital’s Andrew Kaip also downgraded the stock to “market perform” from “outperform” in April, citing “growing contagion” of sanctions against Russian companies and officials.

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