Why Analyst Sentiment on Newmont Goldcorp Has Turned Around


Jun. 11 2019, Updated 3:19 p.m. ET

Analyst ratings

Among the 17 analysts currently covering Newmont Goldcorp (NEM), 71% have “buy” ratings on the stock and 12% have “sell” ratings on the stock. Among senior and intermediate gold mining peers (GDX), NEM’s percentage of “buy” ratings is behind only Agnico Eagle Mines (AEM), which has 78% “buy” ratings.

On the other extreme, Kinross Gold (KGC) and Barrick Gold (GOLD) have “buy” ratings from only 40% and 16% of the analysts covering them, respectively.

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Sentiment turnaround

Newmont has been focusing on reducing debt, which has been instrumental in turning analysts’ sentiment around. It had only 56% “buy” ratings one year ago. 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 execution with Goldcorp. In Could the Newmont-Goldcorp Merger Form ‘The Go-To Gold Equity’? we learned that Newmont paid a 17% premium to acquire stock from Goldcorp.

Recent rating changes

Some of the recent analyst rating changes include Citigroup analyst Alexander Hacking’s upgrade of NEM stock from “neutral” to “buy” on May 23. He also raised the stock’s target price from $36 to $40. On the same say, he also downgraded Barrick Gold (GOLD) stock from “buy” to “neutral.” Hacking believes that while the gold sector (GDX) remains challenging, NEM offers better value than GOLD.

You can also look at Gold Miners: Wall Street Optimistic after Q1 Earnings for in-depth analysis of analyst sentiment on gold miners after Q1 results.


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