Before the bell this morning, TD Securities dropped its price target for Kinross Gold Corporation (KGC - 13.48) to $18.50 from $19. The note echoes that of RBC, which last night cut its target to $20 from $21. There could be additional target cuts in store for KGC. Thomson Reuters places the consensus 12-month price target on the security at $21.17, representing a hefty 55.5% premium to yesterday's closing price of $13.61.
Moreover, 10 out of 19 analysts following the Toronto-based gold mining outfit consider the stock worthy of a "buy" or better rating. Zacks reports eight "strong buys" and two "buy" endorsements, versus nine tepid "holds" and zero "sell" suggestions.
Elsewhere, short interest for KGC dropped by 24.5% over the past month. These bearish bets now account for just 0.40% of the security's float, which points to a rather meager supply of sideline cash. In other words, it seems that relatively few traders are betting on the stock to take a hit.
Meanwhile, options players are overwhelmingly bullish toward KGC, as evidenced by the stock's 10-day call/put volume ratio of 30.16 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This call-heavy ratio arrives eight percentage points from an optimistic peak, implying that traders on these exchanges have seldom bought calls over puts at a faster clip during the past year.
From a technical standpoint, KGC has been an underperformer, losing more than 28% during 2011. In fact, the stock has lagged the broader S&P 500 Index (SPX) by nearly 26.7% over the past three months. Thanks to today's negative note, the shares are down slightly, staring up at their 10-week moving average, while attempting to find a foothold in the formerly supportive $13.50 area.
In light of KGC's technical predicament, an unwinding of bullish sentiment among analysts and/or options players could only exacerbate the stock's year-to-date tumble.
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