7 Gold Stocks That Get the Thumbs Up From Analysts

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Gold stocks have outperformed equity markets in the past few months, amid a confluence of factors. Ramping inflation, recession risks and the war in Ukraine lifted interest for the yellow metal. Gold tends to perform well during market turmoil, as it is considered a hedge against volatility. Besides, agricultural commodity prices soared after the Russian invasion of Ukraine, prompting investors to seek refuge in the safe-haven assets, such as gold. The Federal Reserve’s monetary policy tightening is another catalyst for gold prices. Indeed, gold’s traditional store of value gets more appealing to investors when interest rates rise.

Gold stocks, measured by the SPDR Gold MiniShares (NYSEARCA:GLDM) as a proxy, lifted 9.8% year-to-date to $39 per share. In the meantime, the SPDR S&P 500 Trust ETF (NYSEARCA:SPY) dipped 8.3% over the period.

In this context, here is a list of gold stocks that get the thumbs up from analysts and set to continue to outperform the equity market.

Gold Stocks: B2Gold (BTG)

B2Gold is a Canadian mining company operating gold mines in Mali, Namibia and the Philippines. Since the beginning of the year, BTG shares outperformed the broader market and its complex, expanding 29.43% to $4.97 per share.

The company announced April 14 that total gold production for Q1 2022 was 5% above budget to 209,365 ounces in the period. This strong performance was due to higher processed grades in the Masbate Mine in the Philippines, where production came 11% above budget to 59,764 ounces.

With this robust report, the consensus of analysts remains positive on BTG’s equity story, proposing a 12-month average target price of $6.21 per share, symbolizing an attractive upside of 24.95% per share.

Despite this strong performance, BTG stock has one of the cheapest valuations of gold stocks. Indeed, the gold company trades at a forward enterprise value (EV) on earnings before interest, taxes, depreciation and amortization (EBITDA) of only 4.49 times and a price-to-earnings (P/E) ratio of 14.1.

SSR Mining (SSRM)

SSR Mining is a gold mining company with four high-quality development and producing assets located in the U.S., Turkey, Canada and Argentina.

In 2021, SSRM’s assets produced approximately 794,000 gold-equivalent ounces. Last week, SSRM announced the completion of the Taiga Gold acquisition, consolidating a 100% interest in the Fisher property and adding five new prospective properties, where to date, four separate high-grade gold discoveries have been made.

SSR shares surged 40.44% since the beginning of the year to $24.10. Yet, analysts expect additional upside on the stock. SSRM stock has an average target price of $24.79 per share, a potential of 2.86% from its last closing price.

The company’s net income is however projected to decelerate 27.3% in 2022 to 317 million CAD ($251.2 million). Revenues are expected to decline moderately, down 6.7% year-on-year to 1.75 billion CAD. Despite that, SSRM has a healthy estimated profit margin of 18.1% in 2022.

In addition, SSRM trades at a low 2022e EV/EBITDA of 6.45x and is anticipated to offer a dividend yield of 1.05% over the year.

Barrick Gold (GOLD)

Barrick Gold is a Canadian gold and copper mining company holding an interest in 14 gold mines including six Tier 1 gold assets.

Since the beginning of the year, GOLD stock advanced robustly, gaining 35.92% to $25.38 per share. The company recently released gold production figures for the Q1 2022, coming lower than Q4 2021 numbers, amid planned maintenance in the Turquoise Ridge mine, mine sequencing in Tongon, and higher-grade underground ore stockpile depletion in the Carlin and Cortez mines.

The consensus of analysts remains bullish on GOLD’s prospects, estimating a 12-month average target price of $26.42 per share or an upside of 4.84%.

While Barrick’s throughput weakness is expected to dissipate as the year progresses, net income is forecasted to decelerate moderately in 2022, down 4% year-on-year to 1.94 billion CAD.

GOLD’s estimated profit margin of 16.2% in 2022 remains robust and should continue to support the shares of the gold specialist. Besides, GOLD stock trades at reasonable multiples, posting a forward EV/EBITDA of 6.86x, and is expected to deliver a yield of 2.19% this year.

Equinox Gold (EQX)

Equinox Gold is another Canada-based mining company with a focus on gold. EQX stock advanced 33.63% year-to-date to $8.77 per share, slightly lagging gold stocks.

The company began operations at the new Santa Luz mine in Brazil in March 2022, after completing the project on time and on budget. With an annual production of approximately 100,000 ounces of gold per year, EQX stock is set for additional upside going forward. Besides, EQX’s top line is expected to advanced 11% this year to $1.2 billion and 15.2% to $1.38 billion in 2023.

EQX’s profitability is projected to decelerate vigorously from a net margin of 51.4% in 2021 to 4.58% in 2022. However, EQT’s profit margin is estimated to bounce in 2023 to 10.2%, amid gold throughput ramp-up in its new mine.

Analysts see renewed upside on EQX shares, offering an average target price of $9.46 per share, representing an appreciation potential of 6.29% in the next 12 months. EQX stock is, however, more expensive than other gold stock. The company is currently trading at 8x 2022e EV/EBITDA, but exchanges at…

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