Strong U.S. economic data and a consequent rise in bond yields have been creating selling pressure on gold. A sharp increase in new home sales in the United States, record high output at manufacturing and services sectors, a decline in unemployment, and strong consumer spending signal a rapid economic recovery. As a result, the non-interest-bearing yellow metal is losing its appeal as a safe-haven asset. A strengthening U.S. dollar is another major factor that is diminishing the metal’s attractiveness.
However, experts say renewed import demand from India and China could offer some support to gold in the near future. Furthermore, gold prices are likely to strengthen going forward due to global inflationary pressure. Analysts believe that gold prices have yet to factor in an increase in inflation.
Given this backdrop, Wall Street analysts expect gold mining stocks, Kinross Gold Corporation (KGC – Get Rating), and B2Gold Corp (BTG – Get Rating), and Yamana Gold Inc. (AUY – Get Rating) to advance more than 30% over the next 12 months.
KGC is a Canadian miner that acquires, explores, and develops gold properties in the United States, Brazil, Chile, Ghana, and Mauritania. The company also extracts and processes gold-containing ores and reclaims gold mining properties.
Of seven analysts that have rated KGC, six rated it Buy and one rated it Hold. Also, the $10.49 consensus price target represents a potential 42.7% upside.
During the fourth quarter ended December 31, 2020, KGC produced 624,032 ounces of gold, indicating a 3.4% year-over-year decline. The company’s free cash flow at the end of the quarter was $382.8 million. KGC’s metal sales for the quarter climbed 19.9% year-over-year to $1.2 billion. And its EPS for the quarter rose to $0.62 from $0.40 posted in the same period last year. KGC’s three largest producing mines of KGC—Paracatu, Kupol and Tasiast—accounted for 62% of KGC’s production and were the lowest cost mines in its portfolio in 2020, for the second consecutive year.
Analysts expect KGC’s revenue for the quarter ended March 31, 2021 to be $1.1 billion, representing a 28.15% year-over-year growth. EPS during the period is expected to grow 70% to $0.17.
KGC ended Friday’s trading session at $7.35, surging 7% over the past year. The stock has declined 14.6% over the past six months.
It’s no surprise that KGC has an overall rating of B, which equates to Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
KGC has a B grade for Value, Momentum, and Quality. In the C-rated Miners – Gold industry, it is ranked #8 of 41 stocks.
In addition to the grades we’ve just highlighted, one can see the KGC ratings for Stability, Growth, and Sentiment here.
BTG explores for and develops gold and mineral properties in Nicaragua, Philippines, Namibia, Burkina Faso, and Chile.
Of nine covering analysts, seven have rated BTG a Buy, while two have rated it Hold. Also, the $7.45 consensus price target represents a potential upside of 46.9%.
BTG’s total gold production in the first quarter, ended March 31, 2021, was 220,644 ounces, surpassing its budget by…
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