Shares of Kinross Gold Corporation (USA) KGC were trading up 4.3 percent on Tuesday afternoon after Credit Suisse upgraded its rating on the stock from Neutral to Outperform. The firm also boosted its price target From $2.25 to $2.75.
The analysts argued that the “turning tide on gold” benefits the company.
The Ratings, Price Target And Justification
Credit Suisse analysts Anita Soni and Robert Reynolds upgraded shares of Kinross Gold late on Monday on potential margin expansion and an attractive valuation.
- 1) Currency tailwinds that could help the company beat estimates on 2016 guidance and result in higher NAV projections for Paracatu and Kupol;
- 2) Relatively reduced reserve risk;
- 3) An ameliorated production profile;
- 4) Decreasing balance sheet risk with increased gold prices; and
- 5) Appealing valuation and a high leverage to the gold price.
The price target was raised by $0.50 to $2.75 on higher NAV, lower opex at Paracatu and Kupol, more elevated OpCFa estimates and an increased NAV target multiple.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
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