Wall Street Ratings: Gauging Gold Miners’ Upside Potentials

Agnico Eagle Mines and IAMGOLD

Among senior and intermediate gold miners (GDX) (GDXJ), analysts are most bullish on Agnico Eagle Mines (AEM). It has 83% “buy” and 17% “hold” ratings.

Analysts’ expectations for AEM have improved over the last few months. Until September’s end, AEM had “buy” ratings from only 50.0% of the analysts covering it. As AEM’s projects kick in from 2019 onward, the company is expected to enter a harvesting stage, positively affecting its cash flows.

Wall Street Ratings: Gauging Gold Miners’ Upside Potentials


IAMGOLD (IAG) has a similar amount of “buy” ratings, with 83% of the analysts covering it recommending “buys.” Even after the company’s higher-than-expected loss in its fourth-quarter results, analysts are standing firm on their ratings.

Recently, IAG announced plans to lay off 32% of the workers at its Westwood mine as a stabilizing cost-control measure. It also decided to defer its Côté Gold project. These developments have acted as positive catalysts, as investors don’t want the company to take any more risks at this stage.

Yamana Gold and Newmont Mining

Yamana Gold (AUY) is next, with 69% of analysts rating it as a “buy,” while the rest are divided equally between “holds” and “sells.” Yamana’s fourth-quarter earnings results were better than expected, beating both earnings and revenue estimates as its production came in ahead of its guidance and its costs came in better than expected. Moreover, analysts are quite optimistic about the company’s Cerro Moro mine.

Newmont Mining (NEM) has “buy” ratings from 67% of the analysts covering it. Analysts are looking forward to the company’s completion of its merger with Goldcorp (GG). NEM’s focus on debt reduction and the strong execution of its project pipeline are likely the drivers of analysts’ positive outlook.

Least favorite

Barrick Gold (GOLD) has the lowest percentage of “buy” ratings. Just 10% of the 20 analysts covering the stock have given it “buy” ratings, and 85% have given it “holds.” Analysts turned negative on GOLD after its protracted issues in Tanzania and Argentina. While analysts are optimistic about its merger with Randgold Resources, they’re now likely awaiting the execution of the merger and the related synergy benefits to turn more positive on its stock.