Shares of Kinross Gold Corp. (KGC) have been on an amazing run recently, rising 91% since mid-August. That easily beats the gains in the gold price and the company's key rivals.
But could that run be coming to an end? That's the question UBS Securities analyst Tony Lesiak is asking. He points out that Kinross is trading at a 20% premium to its peers on a net asset value basis, assuming a US$760/oz gold price.
"While Kinross remains one of the most liquid and levered gold names, it is not as levered as it once was given its lower cost Kupol ounces, copper at Cerro Casale, and modest hedge book," he wrote in a note to clients.
Mr. Lesiak is downgrading the stock to "neutral" from "buy" because of the share price appreciation, but is maintaining his price target of US$22 a share.
Kinross reports third quarter earnings after the close Wednesday night (Nov. 7) and Mr. Lesiak believes the report may highlight capital cost increases at two of the company's development projects, and a start-up delay at the Buckhorn Project.