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Credit Suisse Is Positive On Gold Equities, Lists 4 Stocks To Buy

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Anita Soni of Credit Suisse on Friday stated in a note that gold equities may see outperformance in 2015 driven by margin expansion, gold price stability, renewed interest in the space and potential merger and acquisition activity.

According to Soni, the gold industry put in to place measures to reduce costs and optimize mines as early as 2012. Now that more than two full years have passed, the analyst notes that some companies are positioned to deliver positive free cash flow in 2015 if gold were to trade at $1,200 per ounce. This holds especially true as gold producers also benefit from lower oil prices and weaker non-U.S. currencies that provide a cost benefit.

Soni states that gold equities provide investors an “attractive commodity play” and represent an investment in a commodity more tied to global monetary policy and consumer demand in emerging markets than alternatives in the commodity complex.

Agnico Eagle Mines Ltd (USA) (NYSE: AEM) is Soni's top pick given its lower cost assets, operational consistency and strong free cash flow and growth prospects in 2015. Eldorado Gold Corp (USA) (NYSE: EGO) is another top pick given its strong balance sheet and organic growth profile.

Goldcorp Inc. (USA) (NYSE: GG) is Soni's preferred senior stock on a 12-month view given its relatively strong balance sheet and growth. Finally, the Franco-Nevada Corporation (NYSE: FNV) is the analyst's preferred defensive gold stock due to its royalty and streaming model and ability to executive on accretive acquisitions.

Latest Ratings for EGO

DateFirmActionFromTo
Oct 2020RBC CapitalUpgradesUnderperformSector Perform
Feb 2020CIBCUpgradesNeutralOutperformer
Jan 2020Credit SuisseDowngradesNeutralUnderperform

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Posted-In: Anita Soni Credit Suisse Gold Gold EquitiesAnalyst Color Long Ideas Analyst Ratings Trading Ideas

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