How Analysts View Top Gold Stocks After Huge Rally and Earnings

February 21, 2016 by Paul Ausick

Over the past 12 months, the price of gold has dipped to a low of around $1,047 an ounce and jumped to a high of near $1,265 last week. The yellow metal is mounting a comeback on weak economic forecasts, negative interest rates in Europe and fears of the same in the United States, and volatility in the currency markets.

Shares in gold mining companies have also bounced back, for the most part, with most of the gains coming since the first of the year. Four gold miners reported earnings last week — Barrick Gold Corp. (NYSE: ABX), Newmont Mining Corp. (NYSE: NEM), IAMGOLD Corp. (NYSE: IAG) and New Gold Inc. (NYSEMKT: NGD) — and analysts were quick to raise price targets while leaving ratings alone.

In comments related to Barrick, analysts at S&P Capital IQ said:

Our risk assessment reflects [Barrick]’s exposure to markets for gold and copper, both cyclical commodities, along with the challenge of replacing reserves, partly offset by our view of its strong balance sheet and its pipeline of growth projects.

That’s a succinct statement of how to evaluate the metals market right now.


Here are other recent price and ratings changes we’ve noted:

Barrick

  • Jefferies raised its price target from $9 to $11 with a Hold rating.
  • Bank of America Merrill Lynch kept a Neutral rating and a $12.50 price objective.
  • Barclays raised its price target from $9 to $13 with an Equal Weight rating.
  • CIBC rated the stock a Sector Performer and raised its price target from $9.50 to $11.25.
  • Citigroup rates the stock a Buy and raised its price target from $10 to $15.
  • Goldman Sachs raised its price target from $11.50 to $15.00 and rates the stock a Buy.

Barrick shares closed down about 0.6% at $12.56, in a 52-week range of $5.91 to $13.70. The stock’s consensus price target is $11.48, although not all new targets may yet be included.

Newmont

  • Barclays raised price target from $24 to $26 with an Equal Weight rating.
  • Merrill Lynch maintained its Buy rating and a $26 price objective it had raised from $23 just two weeks earlier.
  • CIBC raised its price target from $24.50 to $28.50.
  • Credit Suisse raised the price target to $27 with an Outperform rating.
  • Jefferies raised its price target from $24 to $28 and rates the stock a Buy.
  • Morningstar maintained its Hold rating.
  • S&P Capital IQ also maintained a Hold rating.

Newmont’s stock closed down about 0.9% on Friday, at $24.84 in a 52-week range of $15.39 to $27.90. The consensus price target on the stock is $25.12.

IAMGOLD

  • CIBC raised its price target from $1.75 to $2.00 and rates the stock Sector Underperform.

Shares closed at $2.46 on Friday, down about 0.4%, in a 52-week range of $1.15 to $2.57. That high was posted Friday, and the consensus price target is $1.81.

New Gold

  • BMO Capital raised price target from $4.00 to $4.75 and rates the stock Outperform.
  • CIBC raised price target from $3.00 to $3.50 with a Sector Performer rating.

The stock closed at $3.01 on Friday, down about 2.3%, in a 52-week range of $1.76 to $4.03. The consensus price target is $3.07.