In this article, we’ll look at the recent ratings and recommendations from Wall Street analysts for gold miners ahead of their third-quarter earnings results. These ratings reflect analysts’ sentiment toward a particular company or industry. At extreme levels, these ratings could even signal a change in direction, so it’s important for investors to track this data.
Ratings and rationale
In the senior and intermediate gold miner space (GDX)(GDXJ), analysts are the most bullish on IAMGOLD (IAG), with ~75.0% of analysts assigning it a “buy.” About 25.0% of these analysts rated it as a “hold,” and there were no “sell” ratings.
There has been a significant turnaround in analysts’ sentiment for the stock. Until December 2017, only 54.0% of analysts were recommending “buys” on the stock. IAG’s first-quarter and second-quarter operating results were strong, which along with multiple organic growth opportunities helped turn the analyst sentiment around.
Agnico Eagle Mines (AEM) comes next with 72.0% “buy” ratings. The analyst sentiment for AEM has also improved recently. Until the end of February, only 50.0% of the analysts rated it as a “buy.”
AUY, GG, and NEM
Yamana Gold (AUY) closely follows Agnico with 71.0% “buy” ratings. Analysts have turned around in droves for the stock due to the potential of its newly started mine, Cerro Moro. A year ago, it had “buy” ratings from only 31.0% of the analysts covering it.
Goldcorp (GG) comes next with 65.0% “buy” ratings and 30.0% “hold” ratings. Analysts’ sentiment toward GG stock has also been improving. Despite its weaker operational performance year-to-date, analysts are optimistic given its 20/20/20 plan to improve production, costs, and reserves by 20.0% each by 2021.
Newmont Mining (NEM) follows with “buy” ratings from 58.0% of the analysts. Analysts’ ratings for NEM stock haven’t changed much in the last few months, mainly due to the lack of any major catalyst.
In the next part of this series, we’ll see which miners don’t rank that high on analysts’ radars.