Market Overview

Mackie Research Cuts Barrick Gold To Hold, Iamgold To Sell

Mackie Research Cuts Barrick Gold To Hold, Iamgold To Sell

Mackie Research has revised ratings on gold producers Barrick Gold Corporation (USA) (NYSE: ABX) and IAMGOLD Corp (USA) (NYSE: IAG).

Analyst Barry Allan has downgraded Barrick Gold to Hold from Buy on increasing share price and said the market has recognized improvements in underlying performance. Since the third quarter of 2015, the share price of Barrick Gold has performed nicely, rising off all-time lows and rising more than 100 percent.

"While our NAV increases from C$14.08 to C$15.80 driven by lower debt and increased reserves, unfortunately we are taking our recommendation from BUY to HOLD as a result of good performance of the share price. Without higher gold prices, our target only rises to $16 from $14, reflecting the increase in NAV," Allan said in a note to clients.

For 2015, Barrick's production totaled 6.12 million ounces (Moz) at direct operating costs of US $596/oz, largely due to excellent operating performance at Goldstrike and Cortez mines. For 2016, after asset sales, the analyst forecast gold production of 5.4 Moz at a direct cost of US $544/oz, generating operating cash flow of about US $2.1 billion.

Related Link: Yamana Gold Reports Mixed Q4, Shares Gain 0.75%

Another Golden Downgrade

Allan also cut the rating on Iamgold to Sell from Hold" citing distinct lack of excitement in fundamentals.

The analyst said, "Due to a rise in the share price, we are changing our recommendation to SELL from HOLD and fail to see any reason to own the equity. With a flat to declining production profile for 2016 and 2017, and a relatively high, all-in cost of ~US $1,200, other than the potential for higher gold prices, there is no fundamental reason to be involved with the stock."

The 2015 production at Iamgold came in at 806,000 ounces at a cost of US $835/oz. The company is working hard just to maintain production and an acceptable all-in operating cost.

Image Credit: Public Domain

Latest Ratings for IAG

Jan 2021RBC CapitalUpgradesSector PerformOutperform
Nov 2020TD SecuritiesMaintainsBuy
Nov 2020BMO CapitalMaintainsMarket Perform

View More Analyst Ratings for IAG
View the Latest Analyst Ratings


Related Articles (ABX + IAG)

View Comments and Join the Discussion!

Posted-In: Analyst Color News Short Ideas Downgrades Price Target Commodities Markets Analyst Ratings