Is it possible that the view on gold mining stocks could be coming back in favor again? It turns out that 24/7 Wall St. witnessed key upgrades from different analysts on gold stocks of Goldcorp Inc. (NYSE: GG) and Newmont Mining Corp. (NYSE: NEM). These are among the larger players out there. Newmont has a market cap of almost $13 billion and Goldcorp has a market cap of almost $14 billion.
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Goldcorp was maintained as an official Buy rating at TD Securities, but the gold giant was added as an Action List Buy with a whopping $29.00 price target. What stood out here was that this upgrade suggests an upside of about 80% from the closing price of $16.23. Shares were up 2% at $16.56 in mid-afternoon trading on Tuesday.
The driving forces behind the action-list focal point for Goldcorp werenear-term growth, a healthy balance sheet and lower geopolitical risk than other gold producers and miners. The recent $1 billion sale of its Tahoe stake also played a role on that balance sheet strengthening comment.
Goldcorp has a consensus analyst price target of $24.60 and a 52-week trading range of $16.18 to $29.65. This $29.00 is the highest analyst price target on Wall Street.
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Newmont Mining was reinstated as Outperform with a $30.00 price target (versus a $23.95 close) at Credit Suisse. Investors should keep in mind that Newmont recently closed on a common stock sale to Citigroup and JPMorgan that brought in net proceeds of $674 million.
Credit Suisse said that its net asset value is largely unchanged at $16.84 per share, from $16.96 per share, on the heels of its Cripple Creek & Victor sale on June 9 for $820 million in cash. Its optimizations could add about $254 million to the firm’s net asset value. The firm also sees an additional $100 million per year free cash flow.
Newmont’s shares were up almost 0.9% at $24.17, and the consensus price target is $27.50. Newmont’s 52-week range is $17.60 to $27.90.
As far as gold itself, gold continues to swing around the volatility in Europe. Gold was down again on Tuesday, at just under $1180 per ounce, after having been back just above $1,200 last week.
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