Bank of America has lowered its price forecasts for gold, silver and copper and cut price targets for several of its top precious metal stock picks.
The Analyst: Bank of America analyst Michael Jalonen lowered price targets for 18 precious metal stocks, including the following names:
- Agnico Eagle Mines Ltd AEM Buy rating reiterated, target cut from $80 to $67.
- Newmont Corporation NEM Buy rating reiterated, target cut from $80 to $74.
- Barrick Gold Corp GOLD Buy rating reiterated, target cut from $29 to $27.
- Kinross Gold Corporation KGC Buy rating reiterated, target cut from $9 to $8.10.
- B2Gold Corp. BTG Buy rating reiterated, target cut from $5.45 to $4.40.
- Franco Nevada Corp FNV Buy rating reiterated, target cut from $163 to $157.75.
- Wheaton Precious Metals Corp WPM Buy rating reiterated, target cut from $55 to $53.50.
- Pan American Silver Corp. PAAS Buy rating reiterated, target cut from $42.75 to $36.80.
- Eldorado Gold Corp EGO Buy rating reiterated, target cut from $13.25 to $10.75.
The Takeaways: In the note, Bank of America cut its 2021 gold, silver and copper price forecasts by 1.4%, 6.8% and 5.3%, respectively.
Looking ahead to 2022, the firm raised its gold price forecast by 1.4% to $1,875 per ounce. BofA cut its 2022 silver price forecast by 2.8% to $29.40/oz and reduced its 2022 copper forecast by 21% to $9,875 per ton.
“Copper fundamentals look strong beyond 2025, but in our view the market should move into surplus next year,” Jalonen said.
Despite the price cuts, Janolen’s ratings suggest he is generally bullish on precious metal stocks as a whole. He also named Newmont ashis top senior gold producer stock, Franco-Nevada his top royalty and streaming stock and Wheaton Precious Metals his top silver stock.
Pan American Silver is Jalonen’s top intermediate precious metals stock pick, while SSR Mining Inc SSRM is his top intermediate gold producer stock.
Benzinga’s Take: Obviously it’s not good news for precious metal investors to see target prices falling, but Jalonen obviously still sees plenty of opportunity for robust free cash flow among these top stock pics with prices at their current levels.
Bank of America noted the current gold bull market is roughly five years old, and gold bull markets have historically lasted about 10 years.
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