Market Overview

BMO Resumes Coverage On Gold Stocks: Bullish On Barrick, Neutral On Newmont

BMO Resumes Coverage On Gold Stocks: Bullish On Barrick, Neutral On Newmont

BMO Capital Markets resumed coverage of several gold stocks Wednesday with a bullish stance on Barrick Gold Corp (NYSE: GOLD) and a neutral stance on Newmont Goldcorp Corp (NYSE: NEM).

The Analyst

Andrew Kaip resumed coverage of Barrick Gold and upgraded the stock from Market Perform to Outperform with a price target lifted from $14.50 to $20.

Kaip also resumed coverage of Newmont's stock with a downgrade from Outperform to Market Perform and a price target lowered from $45 to $42.

Barrick: Unlocked Value Through JV

Barrick's Nevada joint venture with Newmont should unlock value for Barrick, Kaip said in the Wednesday upgrade note. (See his track record here.)

As part of the joint venture, Barrick has a 61.5% ownership stake of the Nevada operation that is meant to unlock up to $5 billion in pre-tax net present value over the next 20 years, the analyst said. 

Barrick likely "had to give a little" on the net present value and future reserve front to secure the agreement, although the benefits from the deal likely outweigh the costs, he said. 


Newmont's 2019 acquisition of Goldcorp and the JV with Barrick are both "accretive events," but investor concern with the Goldcorp deal and recent concerning headlines should "temper investor interest," Kaip said in the downgrade note. 

A downgrade of Newmont is a "tough call" to make, but likely justified until Newmont is "able to demonstrate value," the analyst said.

A rating revision could be made when the Goldcorp acquisition and Nevada JV show benefits, although any material results are unlikely to be seen until late 2019 or early 2020, according to BMO. 

Price Action

Barrick Gold shares were trading higher by 1.35% to $15.80 at the time of publication Wednesday, while Newmont shares were up 0.88% at $38.78. 

Related Links:

Gold ETFs Are Having A Moment

Strap Yourselves In - Gold May Take Off Like A Rocketship

Latest Ratings for GOLD

Mar 2020Deutsche BankMaintainsBuy
Mar 2020UBSUpgradesNeutralBuy
Feb 2020H.C. WainwrightReiteratesBuy

View More Analyst Ratings for GOLD
View the Latest Analyst Ratings


Related Articles (GOLD + NEM)

View Comments and Join the Discussion!

Posted-In: Andrew Kaip BMO Capital MarketsAnalyst Color Price Target Commodities Initiation Markets Analyst Ratings Best of Benzinga

Latest Ratings

XPOJP MorganMaintains84.0
UPSJP MorganMaintains113.0
UNPJP MorganMaintains163.0
NSCJP MorganMaintains189.0
MCHPJP MorganMaintains100.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at