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What Factors Are Affecting Revenue Forecasts for Gold Miners?

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Analysts’ forecasts

In the previous article, we looked at analysts’ ratings for senior gold mining companies. In this article, we’ll look at analysts’ estimates for those companies’ (GDX) (JNUG) revenues going forward.

These forecasts can be valuable when it comes to assessing analysts’ views on gold prices (GLD).

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Analysts’ revenue expectations

According to the consensus estimate compiled by Thomson Reuters, Wall Street analysts expect revenue of ~$7.23 billion for Barrick Gold (ABX) in 2018, implying a fall of 12% YoY (year-over-year). Barrick expects its production to fall 11% YoY. The expected fall in its production has been the main driver of analysts’ lower revenue estimates.

Analysts expect Newmont Mining’s (NEM) revenue to fall 4.0% YoY to $7.0 billion in 2018. According to NEM’s new guidance, its production is expected to fall 3.3% YoY at the midpoint in 2018. Its lower production guidance has led analysts to downgrade their revenue estimates too.

Kinross Gold and Goldcorp

Kinross Gold’s (KGC) revenue estimate for 2018 is $3.2 billion, a YoY fall of 2.6%. Its production guidance suggests a 6.4% YoY fall in production. A higher expected fall in KGC’s production is driving its slight revenue decline despite analysts’ higher estimates for precious metals prices.

Previously, Goldcorp (GG) was the only senior gold miner to have a positive analyst revenue growth estimate for 2018. However, after its disappointing string of quarterly performances and its production guidance downgrade, analysts now expect GG’s revenue to fall 6.8% YoY in 2018. Its new guidance for production suggests a fall of 11% YoY.

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