Analyst Upgrades: Barrick Gold, Eldorado Gold, and Goldcorp

Analysts upwardly revised their ratings and price targets on Barrick Gold Corporation (USA) (ABX), Eldorado Gold Corp (USA) (EGO), and Goldcorp Inc. (USA) (GG)

Jun 27, 2016 at 10:07 AM
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Analysts are weighing in on gold stocks Barrick Gold Corporation (USA) (NYSE:ABX), Eldorado Gold Corp (USA) (NYSE:EGO), and Goldcorp Inc. (USA) (NYSE:GG), as gold futures approach two-year highs after last week's "Brexit" referendum. Here's a quick roundup of today's bullish brokerage notes on ABX, EGO, and GG.

  • ABX is up 3.6% at $21.22 -- within striking distance of a new two-year high -- after the shocking "Brexit" vote left investors scrambling to put their money into "safe haven" assets. Barrick Gold Corporation (USA) was added to Goldman Sachs' "Conviction Buy" list, and saw its price target lifted to $27 from $23, with the analysts stating, "We believe it is well positioned to outperform as gold price fundamentals stabilize and the self-help idiosyncratic story continues to gain momentum." In addition, ABX was upgraded to "sector outperformer" from "sector performer" by CIBC, and enjoyed a price-target bump to $20 from $15 by Raymond James. ABX has been a strong performer of late, rallying 187.4% so far this year, and, prior to today, outperforming the S&P 500 Index (SPX) by 52.6 percentage points over the last 60 sessions. Analysts and option buyers don't appear to be completely sold, however, with ABX's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX) of 1.18 sitting in the bearishly skewed 94th percentile of its annual range, and only three of 15 analysts rating ABX a "buy" or better. If ABX's bearish bettors decide to hit the exits, or analysts issue additional upgrades, ABX could enjoy a significant tailwind.
  • EGO is up 3.4% at $4.55, also enjoying a "Brexit"-inspired boost. Raymond James upgraded EGO to "outperform" from "market perform." Eldorado Gold Corp (USA) shares are up over 50% year-to-date, and option bulls have been in a frenzy, with EGO's 10-day ISE/CBOE/PHLX call/put volume ratio of 603.31 indicating that more than 600 calls have been bought to open for every put during the past two weeks. What's more, this ratio sits in the 82nd percentile of its annual range, pointing to a healthier-than-usual appetite for EGO calls over puts.

  • GG ​is up 0.1% at $18.40. Goldman Sachs raised the stock's price target to $22 from $18, while Raymond James bumped GG's price target to $24 from $19.50. Like its sector peers, the stock has seen dramatic gains this year, up 59% so far in 2016, and enjoying support from its 80-day moving average since early February. Option traders still seem pessimistic, however, with GG's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.19 sitting higher than 94% of all other readings from the past year.
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