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Gold Miners: Wall Street Is Optimistic


May. 29 2019, Updated 8:12 a.m. ET

Analysts are turning optimistic

Among senior and intermediate gold miners (GDX) (GDXJ), analysts are the most optimistic about Agnico Eagle Mines (AEM). Agnico Eagle Mines has the most “buy” ratings at 78%. The company doesn’t have any “sell” ratings. A year ago, only 59% of the analysts had “buy” ratings on the stock. Agnico Eagle Mines’ growth projects are kicking off in 2019, which should drive its cash flow generation. The company’s management has done a good job executing the expansion.

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Newmont Goldcorp

Newmont Goldcorp (NEM) has 71% “buy” and 12% “sell” ratings from analysts. The company has been focusing on reducing debt, which has been instrumental in turning analysts’ sentiment around. The strong execution of Newmont Goldcorp’s project pipeline is also driving analysts’ positive outlook. In the future, analysts and investors are looking forward to the company’s merger with Goldcorp. In Could the Newmont-Goldcorp Merger Form ‘The Go-To Gold Equity’? we learned that Newmont is paying a 17% premium to acquire stock from Goldcorp.

Bearish sentiment

Kinross Gold (KGC) is ranked third with 40% “buy” ratings from the 20 analysts covering the stock. The company’s ratings have remained more or less the same in the last few months. Geopolitical issues have plagued the stock since last year. Also, Kinross Gold’s ongoing discussions with the government of Mauritania related to its Tasiast Phase Two expansion are keeping analysts on the sidelines.

Barrick Gold (GOLD) has the lowest “buy” ratings among the miners we’re discussing in this series. Barrick Gold only has 16.0% “buy”  ratings from the analysts covering the stock. Analysts turned negative on Barrick Gold stock following its protracted issues in Tanzania and Argentina. While analysts are happy with Barrick Gold’s merger with Randgold Resources, they’re likely waiting for the execution of the company’s merger and the related synergy benefits to turn more positive on the stock.


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