Let’s look at Wall Street analysts’ recent ratings and recommendations for gold miners ahead of their fourth-quarter earnings results. These ratings reflect analysts’ sentiments toward a particular company or industry.
Ratings and rationale
In the senior and intermediate gold miner space (GDX) (GDXJ), excluding royalty and streaming companies, analysts are the most bullish on Agnico Eagle Mines (AEM), with ~84.0% giving it “buy” ratings. The remaining 16.0% have rated it as a “hold,” and there are no “sell” ratings on its stock.
Analysts’ sentiment for Agnico Eagle Mines has improved over the last few months. Until about a year ago, only 50.0% of analysts called it a “buy.”
IAMGOLD (IAG) follows closely with 83% “buy” ratings. Like AEM, IAG has seen a significant turnaround in analysts’ sentiments. Until about a year ago, only 54% of analysts were recommending “buys” on its stock. Its target price of $7.60 implies a potential upside of 105%. We discussed in Why Analysts’ Sentiments Are Turning Positive on IAMGOLD that the company’s latest decision to defer the construction of its Côté Gold project in Ontario, Canada, has rekindled analysts’ interest.
AUY, GG, and NEM
Yamana Gold (AUY) ranks third with 69% “buy” ratings. Analysts have turned around in droves on the stock due to the potential of its newly started mine, Cerro Moro. Cerro Moro remains a game changer for Yamana. It’s a significant operation for the company, and it’s expected to contribute meaningfully to Yamana’s production growth at below-average costs.
Newmont Mining (NEM) and Goldcorp (GG) come next with 59.0% “buy” ratings each. The two companies announced their merger on January 14. In Could the Newmont-Goldcorp Merger Form ‘The Go-To Gold Equity’? we learned that Newmont had agreed to pay a 17% premium to acquire stock from Goldcorp, which has been struggling to meet market expectations for over a year. Therefore, investors and analysts view this deal as better for Goldcorp than for Newmont.
For a detailed analysis of senior and intermediate miners’ ratings, read Which Five Gold Stocks Are Analysts Loving So Far in 2019?
In the next part of this series, we’ll see which miners don’t rank that high on analysts’ radars.