|Bid||41.38 x 400|
|Ask||41.39 x 400|
|Day's Range||41.29 - 41.81|
|52 Week Range||31.42 - 42.04|
|PE Ratio (TTM)||N/A|
|Earnings Date||Apr 26, 2018|
|Forward Dividend & Yield||0.56 (1.35%)|
|1y Target Est||44.44|
We discussed analysts’ revenue estimates for gold miners in the previous part of this series. In this part, we’ll discuss what analysts expect for these gold miners’ (RING) earnings.
The International Monetary Fund (or IMF) issued an update to its world economic outlook on the eve of IMF and World Bank meetings in Washington this week. The IMF warned that a major trade rift between the US and China could threaten global economic growth, which otherwise should rise solidly this year. The agency still maintained its forecast of 3.9% for global economic growth, which would be the fastest rate of growth since 2011.
Gold prices rose ~3% year-to-date (or YTD) after rising ~13% in 2017. Gold prices are affected by a number of factors, including rate hike expectations, trade war fears, the US dollar, and increasing volatility.
Unrest in Syria played a role in precious metals rising on Friday, April 13. The day before, Donald Trump discussed how to address a recent Syrian poison gas attack. He threatened missile strikes, which were eventually carried out, on Saturday.
The government of new Peruvian President Martin Vizcarra said on Wednesday it would not "impose" mining projects on nearby communities that object to them, but would seek to promote mining investments to take advantage of improved mineral prices. In the past decade, Southern Copper Corp and Newmont Mining Corp have shelved proposed mines in Peru because of opposition from communities worried about the environmental impact - one of the biggest hurdles to building mines in the world's No. 2 copper producer. Peruvian Prime Minister Cesar Villanueva said the government would encourage mining but only approve projects that respect the environment and have support from communities.
The recent unrest in the markets has had a significant effect on precious metals and mining companies. The US dollar has a prominent role in influencing dollar-denominated precious metals and mining stocks.
On April 13, US crude oil (USO) May futures settled at $67.39 per barrel—the highest closing level for US crude oil active futures in more than three years. Oil prices have been climbing lately due to geopolitical tensions, which have increased worries of disruptions to supply, especially in the Middle East. New sanctions on Russia could further lift oil prices.
Overall, gold has been rising in 2018, mainly due to the geopolitical tensions that keep increasing. First, we had fears of a US-China trade war, and now we have the Syrian chemical attack and subsequent air strikes. Another crucial element is the decline of the US dollar, which we’ll look at in the next part of this series.
Geopolitical risk has been one of the major drivers for equity markets and commodities lately. In the latest development, the US, France, and the United Kingdom launched military strikes on Syria over the weekend. Since the strikes were surgical and the pullback was prompt, risk assets haven’t seen much impact from the strikes yet. However, another round of strikes or Russian retaliation could put the markets in risk-off mode.
Among the senior mining companies under review in this series (GDX), Newmont Mining (NEM) is currently trading at the highest EV-to-forward EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple, of 8.3x. The company’s slower production growth added to its woes in 2017. Its follow-through on its long-term vision of improving reserves, production, and unit costs by 20% each by 2021 could go a long way in further re-rating its multiple. Barrick Gold’s (ABX) higher financial leverage is still a concern for investors, and the recent issues at its Tanzanian mines have added to its woes.
Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Newmont Mining Corporation’s (NYSE:NEM) trackRead More...
On March 12, 2018, RBC (Royal Bank of Canada) downgraded Newmont Mining (NEM) to “underperform” from “sector perform,” and cut NEM’s stock price by $1 to $43. On January 16, 2018, Deutsche Bank (DB) downgraded Newmont from “buy” to “hold.” DB analyst Chris Terry believes that whereas the outlook for commodity prices seems bright, Newmont has a rich valuation and catalysts for the stock have already played out.
Freeport-McMoRan (FCX) operates the Grasberg mine in Indonesia (EIDO) with Rio Tinto (RIO) (TRQ) as a minority partner. While the mine is a crown jewel in Freeport’s portfolio due to its vast size and attractive unit cash costs, its operations have been surrounded by uncertainties. Let’s discuss these uncertainties in perspective.
As gold prices remained buoyant, gold equities also rose. The VanEck Vectors Gold Miners ETF (GDX) rose 2.2% against gold’s 1.0% gain. Among the major gold equities, Yamana Gold (AUY) rose the most by 6.4%, followed by IAMGOLD (IAG), which rose 4.6%. These two stocks are more leveraged to gold prices as compared to their peers. IAG, for example, rose 148% and 41% in 2016 and 2017, respectively, against gold price gains of 8% and 13% in 2016 and 2017. Year-to-date (or YTD), AUY and IAG have returned -9.4% and -11.3%, respectively.
Gold soared to two-year highs this week as uncertainty rattles the market. The bull run isn't over yet, says one strategist.
In 1Q18, gold prices (GLD) rose by just 1%. While gold prices have repercussions on gold miners’ performance based on their leverage, most miners’ price movements in 1Q18 have been driven by company-specific factors such as the release of 2017 results, reserves, and 2018 guidance. Among senior gold miners, analysts are most bullish on Goldcorp (GG), assigning it 65% “buy” and 5% “sell” ratings.
Earlier in the day yesterday, gold prices (GLD) touched a 20-month high of $1,367 per ounce, only to slide later in the day. The escalating political tensions between the US and Russia underpinned a risk-off environment in the market, which led to a surge in safe-haven assets such as gold and the Japanese yen. The stock indexes and the dollar, on the other hand, fell on the news.
Newmont Mining (NEM) stock rose 2.4% in 1Q18 while Goldcorp (GG) stock rose 4.5%. Newmont Mining reported an earnings beat in 4Q17. The company’s production and unit costs were in line with its guidance.
Barrick Gold (ABX) has underperformed senior and intermediate peers (GDX) (GDXJ) as well as the broader benchmark index (GDX). Barrick has guided for production of 4.5 million–5.0 million ounces of gold in 2018, which implies a ~11% fall from the midpoint of its actual production in 2017. Barrick Gold raised its all-in sustaining cost guidance for 2018 to $765–$815 per ounce.
Stocks that moved substantially or traded heavily Wednesday: Analogic Inc., down $12.70 to $83.35 The medical and security imaging equipment maker agreed to be bought for $84 a share, less than investors ...
Gold prices rose ~1% in 1Q18 after rising ~13% in 2017. Gold prices are being affected by a number of factors, including rate hike expectations, trade war fears, the US dollar, and increasing volatility.
Usually, precious metal mining companies closely follow precious metals. All four precious metals except platinum saw their prices rise on Tuesday, April 10, 2018.
Usually, precious metal mining companies follow precious metals. Gold, platinum, and palladium had an up-day on Monday, April 9. Though the mining companies tend to closely react to miners, they showed a mixed performance on Monday.
On April 9, 2018, Kinross Gold (KGC) said in a press release that “its mining operations in Russia continue to operate according to plan and remain unaffected by the new sanctions announced by the United States on April 6, 2018.” The company also mentioned that it’s closely monitoring the sanction legislation in Canada, the US, and Europe to remain in compliance. While Kinross has been caught in an unwanted situation, there isn’t much negative impact expected from the sanctions to Kinross’s operations. The stock price reaction can probably be considered an overreaction, as everything related to Russia saw sell-offs yesterday.