Factors impacting Goldcorp’s estimates
After outperforming its peers in the first half of 2018, Goldcorp’s (GG) stock slumped. Its second-quarter earnings were also a miss on market expectations, as were its first-quarter earnings. Moreover, the overall sentiment on gold and gold stocks turned extremely negative starting April, hurting GG stock as well.
Year-to-date, Goldcorp (GG) has lost 15.4%, underperforming the VanEck Vectors Gold Miners ETF (GDX), which has fallen 14.5%. The iShares Gold Trust ETF (GLD) has lost 6.4%. Peers Barrick Gold (ABX), Kinross Gold (KGC), and Agnico Eagle Mines (AEM) have fallen 13.1%, 31.5%, and 19.1%, respectively.
While GG’s latest earnings were a miss on consensus expectations, its 20/20/20 growth plan also seems to be on track. This trend boosted investors’ confidence in GG’s growth and profitability. For more details, please read Why Goldcorp’s Strong Long-term Outlook Is Intact despite Weak Q2.
Analysts’ revenue estimates
Analysts expect Goldcorp’s annual revenues to decline 1.8% in 2018 to $3.48 billion. Its guidance for production growth has been almost flat in the last year. Like other miners, the main driver of its revenue growth should be slightly lower due to precious metal prices.
Afterward, Goldcorp’s projects should start delivering, which is expected to drive production growth. Analysts expect solid growth of 26.4% in Goldcorp’s revenues for 2019 and 3.7% for 2020.
Analysts expect the company’s EBITDA to rise 3.2% year-over-year to $1.5 billion. As Goldcorp’s production base increases, its costs are expected to fall. Analysts expect wider margins for the company of 43.5% and 48.3%, respectively, in 2018 and 2019, compared with 42.8% in 2017.
Goldcorp aspires to achieve all-in sustaining costs of $700.00 per ounce by 2021, compared with $824.00 per ounce in 2017. Peers (SGDM) Agnico Eagle Mines (AEM), Newmont Mining (NEM), and Barrick Gold (ABX) have also shown better-than-expected cost controls.