Key points
- Gold rose to new all-time highs, defying expectations amid a strong U.S. economy and rising stock markets.
- Analysts remain bullish on Newmont, with a consensus price target calling for a significant upside of 33%.
- Despite Barrick Gold’s recent underperformance, analysts see considerable potential, forecasting a 33% upside and assigning a Moderate Buy rating based on sixteen analyst ratings.
- 5 stocks we like most about Agnico Eagle Mines
Gold hit new all-time highs, defying expectations amid a robust US economy and rising stock markets. Its rally appears unstoppable, with gold trading at around $2,300 an ounce, marking an 11% increase year-to-date and a staggering 16% gain over the past 12 months.
Several factors contribute to gold’s notable rally. While the US economy expects a positive growth rate this year, other developed economies such as Germany, Japan and the United Kingdom lag behind with negative growth rates. This divergence, combined with the underperformance of foreign stock markets, pushes investors towards the perceived safety of gold. Additionally, Chinese investors are driving significant demand for gold amid economic instability in China, particularly in the commercial real estate sector.
In the United States, investors are seeking refuge in gold to protect themselves from potential inflation, rebalance portfolios after stock market surges and mitigate geopolitical risks. Expected interest rate cuts and high gold purchases by central banks around the world further strengthen the bullish outlook for gold.
As gold continues its rise, now may be an opportune time to analyze industry giants such as NEM, GFI, FNV, AEM and GOLD, whose fortunes may be intertwined with the commodity’s rise.
Newmont is a gold production and exploration company with a market capitalization of $43 billion and a dividend yield of 2.69%. Notably, the company expects earnings growth of 33% for the full year.
Newmont shares rose 16% from the previous month, thanks to the recent rise in commodities. However, since the beginning of the year, shares of the gold exploration company have fallen 10.5%.
Analysts are significantly bullish on the name, with a Moderate Buy rating and a consensus price target of an impressive 33% upside.
GFI is a major gold producer, boasting a market capitalization of $15 billion. Notably, GFI has demonstrated strong performance relative to its peers, with shares up nearly 16% year to date and a notable 21% gain from the previous month.
Despite GFI’s impressive stock performance and expected 74% full-year earnings growth, analysts are bearish on the company. Analyst ratings are down, reflecting a cautious outlook. The consensus price target also suggests an expected downside of nearly 18%, indicating a lack of confidence in the stock’s future performance.
FNV is a gold-focused streaming and royalties company with a substantial market capitalization of $23 billion. While it is not a direct producer of gold, its unique business model offers investors exposure to the precious metal.
The company has a modest dividend yield of 1.13% and expected earnings growth of 16% next year. Analyst sentiment towards the company is mixed, as indicated by the Hold rating based on eleven analyst ratings.
However, optimism remains regarding FNV’s potential, with the consensus price target calling for an impressive upside of nearly 23%. This suggests that despite the hold rating, analysts see notable growth prospects for FNV in the near future.
Agnico Eagle Mines Limited is a leading gold mining company specializing in the development and production of precious metals. With a solid market capitalization of nearly $31 billion, AEM offers investors substantial exposure to the gold market.
Income-seeking investors may find AEM attractive, as the company boasts a dividend yield of 2.59% and a reasonable price-to-earnings ratio of 15.02. AEM stock’s performance has been impressive year to date, with double-digit gains of nearly 11% and a notable increase of nearly 23% from the previous month.
GOLD is a major global mining entity with operations in North America, South America, Africa and Australia. Barrick Gold specializes primarily in the exploration and production of gold and copper and has established itself as a key player in the industry.
Despite its large presence and diversified operations, Barrick Gold has faced challenges recently, with its shares underperforming compared to its peers. Year to date, the stock is down 8%, although it has shown promising signs, with a notable increase of nearly 15% from the previous month.
Despite the recent setbacks, analysts remain optimistic about the company’s prospects. The consensus price target calls for an impressive 33% upside, reflecting analysts’ confidence in Barrick Gold’s ability to rebound. Based on sixteen analyst ratings, Barrick Gold receives a Moderate Buy rating, indicating optimism about the stock’s growth and recovery potential.
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