uploads///Negative sentiment

Analysts Aren’t So Bullish on These Gold Stocks


Feb. 7 2019, Updated 3:25 p.m. ET

The fewest “buy” ratings

Among senior and intermediate miners (GDX) (JNUG), New Gold (NGD), Barrick Gold (GOLD), Eldorado Gold (EGO), and Kinross Gold (KGC) have the fewest “buy” ratings at 0.0%, 27.0%, 38.0%, and 40.0%, respectively.

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Negative analyst sentiment

New Gold stock was the worst-performing gold stock in 2018, plunging 77% and being reduced to the status of a penny stock due to delays at its Rainy River mine. Year-to-date, the stock has, however, seen a turnaround, rising 47%. 

New Gold released its fourth-quarter production results on January 8. These results were strong, supported by its Rainy River operations. While the stock has been turning, analysts’ sentiments haven’t budged. According to Thomson Reuters, among the 11 analysts covering the stock, none have given it “buy” ratings. The majority of analysts are still waiting on the sidelines to see a more fundamental turnaround in New Gold’s fourth-quarter results before turning positive.

Barrick’s merger and analysts

Barrick Gold (GOLD) has “buy” ratings from only 27.0% of the analysts covering its stock. While analysts turned negative on the stock after its protracted issues in Tanzania and Argentina, its merger with Randgold Resources is striking the right chord. Most analysts are positive on Barrick regarding its merger with Randgold Resources. Immediately after the merger announcement, Citi (C) analyst Alexander Hacking upgraded Barrick from a “neutral” to a “buy” and raised its target price from $11 to $14. TD Securities also upgraded Barrick Gold from a “hold” to a “buy” after the acquisition announcement.

Read Is Barrick Worth a Look after Its Merger with Randgold? for more on this topic.

Eldorado and Kinross

Eldorado Gold (EGO) stock has seen rapidly deteriorating analyst sentiments in the past year. While analysts’ overall sentiment remains negative, things have started turning around. Currently, 38.0% of the analysts covering the stock call it a “buy” compared to the 17% who called it a “buy” at the end of November 2018. Its revised heap-leaching plan resulted in the resumption of operations at its Kisladag mine in Turkey, meaning the suspension of its previously announced mill project.

Kinross Gold (KGC) stock has “buy” ratings from 40% of the analysts covering it. Geopolitical tensions are keeping analysts wary on the stock.

For a detailed analysis of senior and intermediate miners’ ratings, read Five Gold Stocks that Analysts Love and Five Not So Much.

In the next article, we’ll look at the revenue estimates for these miners.


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