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Roth Boosts New Gold To 'Buy' On Valuation

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In a report published Thursday, Roth Capital Partners analyst Joe Reagor upgraded the rating on New Gold Inc. (USA) (NYSE: NGD) from Neutral to Buy, while reducing the price target from $3.50 to $3.25.

The continued decline in the prices of silver and gold is expected to result in reduced revenues and earnings at New Gold. However, the recent decline in the prices of precious metals have been followed by an over correction in New Gold's share price.

In the report Roth Capital Partners noted, "On July 9, 2015, we revised our gold and silver price forecasts for 2015-2017. We elected to lower our forecasts due to a combination of a strong U.S. dollar, a lack of reaction to world events that appear positive for the gold price, and a general herd mentality that fears reentering the precious metals space following the collapse of 2012-2013."

The revenue and EPS estimates for 2015 have been reduced from $760.3 million and $(0.01) to $734.5 million and $(0.04), respectively. The revenue and EPS estimates for 2016 have been cut from $746.3 million and $0.19 to $730.2 million and $0.16, respectively.

"NGD's current share price of $2.68 continues to demonstrate that investors tie the company's valuation to close to gold and ignore copper," analyst Joe Reagor pointed out, while adding that copper had continued to constitute "a significant portion" of New Gold's revenue mix and, while copper prices remained depressed, "our outlook for the back half of 2015 remains positive."

Latest Ratings for NGD

DateFirmActionFromTo
Sep 2017Credit SuisseMaintainsNeutral
Jul 2017National Bank FinancialUpgradesSector PerformOutperform
Jun 2017Raymond JamesReinstatesMarket Perform

View More Analyst Ratings for NGD
View the Latest Analyst Ratings

Posted-In: ROTH Capital PartnersAnalyst Color Upgrades Price Target Analyst Ratings

 

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