Analyst Update: Tesla Motors Inc (TSLA), Barrick Gold Corporation (USA), and Goldcorp Inc. (USA)

Analysts offered their two cents on TSLA, ABX, and GG

by Andrea Kramer

Published on Oct 30, 2014 at 1:11 PM
Updated on Apr 20, 2015 at 5:32 PM

U.S. stocks are mixed at midday, with blue-chips enjoying a halo lift from Visa Inc (NYSE:V), while tech stocks are sticking close to the flat line. Among equities attracting the attention of analysts are electric vehicle maker Tesla Motors Inc (NASDAQ:TSLA), as well as battered commodity concerns Barrick Gold Corporation (USA) (NYSE:ABX) and Goldcorp Inc. (USA) (NYSE:GG).

  • TSLA is down 0.4% at $237.15, despite a fresh "buy" initiation and $320 price target at Ascendiant Capital. The brokerage firm opined that TSLA's "valuation will increase on growth from new product introductions and geographic expansions," and said it's "remarkable … that the traditional automobile industry is unable or unwilling to respond to this clear threat" from Tesla Motors Inc's Model S. On the charts, TSLA remains nearly 58% higher year-to-date, but option traders have grown increasingly put-heavy ahead of the company's earnings release next Tuesday night. The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.54 sits just 3 percentage points from a 12-month peak, suggesting short-term traders have rarely been more put-biased during the past year.

  • ABX is down 4% at $12.32, and earlier touched a new 22-year low of $12.20, due to the combination of sinking gold prices and concerns about the company's Lumwana copper mine. While Barrick Gold Corporation (USA) reported stronger-than-expected quarterly earnings, the firm said it will cut debt next year to curb weak gold prices, and warned that it may be forced to close its Zambia-based mine if the government executes a plan to hike mineral royalties. While Cowen and Company lifted its price target on ABX to $10.96 from $10.90, BMO trimmed its target to $17 and reiterated a "market perform" rating. Outside of the analyst community, ABX's recent crop of option bears are likely cheering today's post-earnings swoon, though the stock has yet to breach the recently popular 12 strike.

  • In similar fashion, GG is 10.2% lower at $19.33, and earlier touched a near-six-year low of $19.19, after confessing to weaker-than-expected third-quarter earnings. The stock is now 10.8% lower year-to-date, yet analysts at J.P. Morgan Securities said now could be an opportune time to buy Goldcorp Inc. (USA) on a dip. "The market should look through this result to the stronger company with a portfolio of young, lower-cost assets that should crystallize by year-end market," the brokerage firm said. Most analysts are already in GG's bullish camp, as the stock boasts 10 "buy" or better endorsements, compared to five "holds" and just one "sell." Likewise, the consensus 12-month price target of $36.02 represents a premium of 86.3% to GG's current price. Should the shares extend their retreat, a round of downgrades and/or price-target cuts could exacerbate selling pressure on the equity.

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