Precious Metal Analyst Watch - April Edition

by: Itinerant

We have been following analyst predictions for precious metal mining stocks on for some time now. In the present article we would like to document the current price targets and take note of recent target changes where applicable.

We prepared three individual tables with our data; one for gold mining companies, one for silver mining companies; and one for precious metal streaming companies. These three tables are displayed below with comments given below each table.

The first two columns of these tables give the company name and the associated ticker. The following four columns show the share price along with the low, median and high analysts price targets. This is followed by two columns giving the number of analysts providing data for each company and the mean recommendation which ranges from 1.0 (strong buy) to 5.0 (sell).

Finally, the rightmost two columns give the difference of the median target and the share price, and the difference between the high and the low target. Both these differences are expressed as a percentage of the share price. The first of these two values represents a measure for the potential of the share price, and the second percentage indicates the divergence between analyst predictions.

The latest readings were taken at the time of writing.

Yamana Gold (NYSE:AUY) currently receives the strongest analyst recommendation (1.9) from the listed gold mining companies. The median target price stands 53.2% above the present share price; however, the lowest target price is quite close to the present share price. Target prices have been unchanged for over a month.

Barrick Gold's (NYSE:ABX) share price is furthest below the low target price. Barrick's share price would have to rise by over 40% just to match the low target; however, the median target has been reduced during the past week from $45.0 to $43.5.

Eldorado Gold's (NYSE:EGO) shares are trading 97.3% below the median target and thus show the greatest potential when considering this measure. By the same token, Eldorado Gold's high and low target differ by 147.5% indicating highly diverging assessments by analysts. The median target was reduced from $17.00 to $16.00 in mid-March. At the same time, Eldorado Gold receives the second-best recommendation score (2.0) of the considered group.

Targets for the considered silver miners have been constant for over a month now.

First Majestic Silver (NYSE:AG) receives the best recommendation score (1.8). The current share price is 60% below the median target, and 24% below the low target.

Endeavour Silver (NYSE:EXK) is followed by five analysts at present with targets only differing by 20.4% and shares currently trading 64.8% below the median target.

Silvercorp Metals (SVM) is currently trading 109% below the median target, and at the same time has the second-smallest difference between the high and low targets (47.5%).

Analysts targets differ by less than 70% for all considered silver mining companies except Silver Standard (NASDAQ:SSRI) where low and high targets differ by 207.3% indicating vastly different perceptions by analysts concerning Silver Standard's future performance, quite possibly a consequence of its exposure to Argentina as a high-risk country jurisdiction.

Of the three considered streamers (sorry, but Sandstorm Gold (NYSEMKT:SAND) does not receive analyst coverage on Silver Wheaton (NYSE:SLW) is showing the greatest potential considering it is trading 66.5% below the median target and almost 39% below the low target. At 1.7 Silver Wheaton also receives the strongest recommendation score of all companies considered in this article.

The only notable movement in target price during the past month has been recorded for Franco Nevada (NYSE:FNV). It is only followed by two analysts; one has decreased the lower target in several steps from $46.06 in early March to presently $42.97.

Parting Shot

Judging from the data provided by analysts the picks for the three categories for April would have to be: Yamana Gold, First Majestic Silver and Silver Wheaton.

Disclosure: I am long SLW, AG, EXK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.