|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||36.85 - 37.37|
|52 Week Range||33.89 - 42.04|
|PE Ratio (TTM)||420.68|
|Earnings Date||Jul 26, 2018|
|Forward Dividend & Yield||0.56 (1.48%)|
|1y Target Est||44.46|
The stock has significantly underperformed its close peers Goldcorp (GG), Newmont Mining (NEM), and Agnico Eagle Mines (AEM), which returned 3.6%, -1.8%, and -1.4%, respectively. The VanEck Vectors Gold Miners ETF (GDX) returned -5.5% over the same period. Some of the same issues are still affecting the stock today. See Market Realist’s series A Look at Barrick Gold after Its 1Q18 Earnings Beat for more on Barrick Gold’s outlook.
Investors are typically interested in gold mining companies’ (GDX)(GDXJ) ability to generate FCF (free cash flow) because FCF helps them invest in future growth—apart from the aim of returning cash to shareholders.
In this part, we’ll discuss what analysts expect for these gold miners’ (RING) earnings. In line with lower revenues, Barrick Gold’s (ABX) EBITDA are also expected to fall. Barrick is expecting its all-in sustaining costs for 2018 to be $765–$815 per ounce, compared to $710–$770 per ounce in 2017.
At extreme levels, these ratings could even signal a change in direction, so it’s important for investors to track this data. In the senior and intermediate gold miner space (GDX)(GDXJ), analysts are the most bullish on IAMGOLD (IAG), with 75.0% of analysts assigning it a “buy.” Plus, 25.0% rated it as a “hold,” and there were no “sell” ratings. Goldcorp (GG) comes next with 70.0% “buy” ratings and 25.0% “hold” ratings.
Gold prices have declined ~5.0% YTD (year-to-date) after rising ~13.0% in 2017. Gold is hitting lows despite factors that favor its safe-haven status. Despite the escalation of trade war fears and political tensions in the European Union, gold prices have been trending lower.
This could indicate that investors who seek to profit from falling equity prices are not currently targeting NEM. Over the last one-month, outflows of investor capital in ETFs holding NEM totaled $750 million.
It’s been hard to be a shareholder in copper and gold stock Freeport-McMoRan (NYSE:FCX) over the last few years. The latest battle and subsequent bruising to its share price stem from issues with the Indonesian government at its largest mine — and there is finally some closure on that front. It’s even worse as it comes at a time when copper prices are starting to drop hard.
Newmont Mining Corporation (NEM) (Newmont or the Company) has completed its Northwest Exodus project, extending mine life from the Exodus underground operation in the Carlin North area for 10 years. Northwest Exodus marks Newmont’s second profitable expansion in the last month adding higher-grade, lower-cost gold production in Nevada. Featuring fit-for-purpose technologies to enhance safety, productivity and efficiency, Northwest Exodus will add between 50,000 and 75,000 ounces of gold production per year and lower Carlin’s all-in sustaining costs by approximately $25 per ounce in the first five years of operation1.
This could indicate that investors who seek to profit from falling equity prices are not currently targeting NEM. Over the last one-month, outflows of investor capital in ETFs holding NEM totaled $394 million.
The CFTC (Commodity Futures Trading Commission) reports the position of major players in the futures market through its COT (Commitment of Traders) report. According to the COT report for the week ended June 26, 2018, money managers were barely net long on gold with just over 4,000 net speculative long contracts. According to Commerzbank, “Short positions, in particular, were built up, which means speculative financial investors are currently betting heavily on falling prices.” For the week ended June 3, money managers kept their positions almost unchanged, which implies the lowest levels of net long positioning since late 2015 when gold prices dipped below $1,050 per ounce.
Canada's Barrick Gold Corp lowered its full-year copper production forecast on Wednesday while increasing its cost estimates, saying the change reflected operational challenges and planned work at its Lumwana mine in Zambia. Barrick, which looks likely to lose its rank as the world's biggest gold producer this year, maintained its 2018 output estimate of between 4.5 million and 5 million ounces of gold at all-in sustaining costs of $765 to $815 an ounce. Rival Newmont Mining Corp has said it expects to produce between 4.9 and 5.4 million ounces of gold in 2018.
Gold prices have gone through a rough patch recently with prices closing near their seven-month lows. Gold is hitting lows despite many factors that are favoring its safe-haven status. Despite the escalation of trade war fears and political tensions in the European Union, gold prices have been trending lower. While these factors have helped gold, the US dollar is also attracting bids because of these factors, which has capped gold’s gains.
Gold Stayed Weak in the First Half of 2018—Will Its Year Improve? On June 12, Morgan Stanley upgraded Newmont Mining (NEM) from an “equal-weight” to an “overweight” and raised its target price to $40 from $37. The brokerage cited stronger execution, a steadier production profile, a stronger project pipeline, a better reserve life, and lower leverage as the main reasons for its preference of NEM over Barrick Gold (ABX).
As far as it goes, Goldcorp (NYSE:GG) probably isn’t the worst stock in the market. In fact, GG stock might actually be one of the better plays in the gold mining space. As I wrote in April, the gold mining space has been a disaster for investors over the past few years.
U.S. equities continue to trade nervously at the start of U.S. trade tariffs on $34 billion of Chinese imports — an act that will then be met with countervailing tariffs on U.S. imports by the Chinese. While far more in potential tariffs have been announced by both sides as threats, neither side is showing any evidence of being interested in backing down from what looks like a worsening cycle of escalation.
Newmont Mining (NEM) and Goldcorp (GG) are the only two senior gold mining stocks that have had positive returns YTD (year-to-date). In the first six months of the year, NEM returned 0.5%, and Goldcorp outperformed its peers significantly with a rise of 7.4%. Newmont Mining reported an earnings beat in the first quarter.
Newmont's (NEM) Twin Creeks Underground expansion project will add 30,000-40,000 ounces of gold per annum at all-in sustaining costs of $650-$750 per ounce.
The gloom in the mining sector is mainly due to the fall in precious metals. Gold, silver, platinum, and palladium have fallen 1.9%, 2.9%, 5.6%, and 0.53%, respectively, on a five-day trailing basis.
Newmont Mining Corporation (NEM) (Newmont or the Company) has achieved commercial production at its Twin Creeks Underground expansion project, adding higher-grade, lower-cost gold production at its Twin Creeks operation in Nevada. The Twin Creeks Underground mine will add between 30,000 and 40,000 ounces of gold production per year at all-in sustaining costs1 of between $650 and $750 per ounce for its first five years of production.
The falling platinum prices have been a major concern for platinum mining companies in Africa. Platinum, like palladium, is used as a catalyst to reduce carbon monoxide emissions in vehicle engines. The platinum market has been in short supply over the last few years, and its deficit is expected to expand in 2018 as well. The same factor that supports palladium prices is also detrimental to platinum prices.
Does the share price for Newmont Mining Corporation (NYSE:NEM) reflect it’s really worth? Today, I will calculate the stock’s intrinsic value by estimating the company’s future cash flows and discountingRead More...