IAMGOLD Shares Higher Following Credit Suisse Upgrade

Credit Suisse upgraded IAMGOLD Corp (USA) IAG to Neutral from Underperform, lifting the price target to $5.25 from $3 on Wednesday. The reasons for this decision were the improving operations of the company and gold leverage. They now expect the gold price to increase through 2016, averaging $1,475/oz in the fourth quarter of this year and $1,500/oz in the first quarter of 2017 with a price average of $1,450/oz in 2017, higher than the $1,313/oz estimated previously.

"We believe IAMGold is turning the corner on operational and financial delivery following a challenging three year period. IAG has above-average leverage to gold prices and benefits from cost exposure to the CAD and Euro," noted Credit Suisse.

The company showed improved life of mine plans for Essakane and Rosebel at its investor day in January and continued the improvements in the first quarter of the year. "Westwood's rehabilitation is progressing with a more comprehensive plan in place to address seismicity and we forecast the mine turning FCF positive by 2018," said the analysts.

As a growth catalysts, the analysts see the positive Free Cash flow generation, delineation of and execution on its capital allocation strategy (internal pipeline vs. external M&A), Westwood operational progress, and exploration updates.