Analysts’ forecasts

Analysts estimates for gold miners’ (GDX) revenues can give us a good idea about their gold price (GLD) outlooks as well as their production.

In this part of our series, we’ll assess analysts’ revenue expectations for gold companies in the fourth quarter and beyond.

What Factors Are Affecting Revenue Estimates for Gold Miners?

Analysts’ revenue expectations

Analysts expect Barrick Gold (GOLD) to generate revenue of ~$1.97 billion in the fourth quarter. This figure implies a fall of 12% YoY (year-over-year) but a rise of 7.6% sequentially. For 2018, analysts’ revenue estimate of $7.2 billion implies a potential fall of 14.0% YoY.

Barrick Gold’s expectation of 11% lower production in 2018 compared to 2017 has been the main driver of analysts’ lower revenue estimates. The expected fall in its production has been the main driver of analysts’ lower revenue estimates for it in 2018.

Analysts expect Newmont Mining’s (NEM) revenue to fall 3.1% YoY in the fourth quarter. Its 2018 revenue is also expected to fall 4.0% YoY. NEM’s lower guided production has been the main driver of this estimate.

According to the company’s guidance, its production is expected to fall 2.8% YoY at the midpoint in 2018. Most of its near-term projects have already come into production, so it might be some time before its medium-term projects start delivering.

Analysts are expecting Goldcorp’s (GG) revenue to fall 2.3% YoY in the fourth quarter and 7.5% in 2018. Goldcorp has disappointed with its operational performance year-to-date.

Kinross Gold and Agnico Eagle

Analysts expect Kinross Gold’s (KGC) fourth-quarter revenue to be $757.0 million, implying a fall of 6.5% YoY. Their revenue estimate for the company in 2018 is $3.2 billion, which represents a potential annual fall of 2.9%. KGC’s production guidance implies a 6.4% fall in its production YoY in 2018.

Analysts expect Agnico Eagle Mines’ (AEM) revenue to fall 7.1% YoY in the fourth quarter to $525.0 million. AEM’s 2018 revenue is also expected to fall 3.2% to $2.2 billion, mainly due to the company’s production being expected to fall.

Agnico Eagle Mines’ growth projects are expected to increase after 2018, which should drive a rise in its production in 2019 and beyond. Analysts expect AEM’s revenues to rise 8.1% and 19.0% in 2019 and 2020, respectively.

In the next part of this series, we’ll discuss these companies’ earnings drivers.

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