Analyst Downgrades: Barrick Gold Corporation, Goldcorp Inc., and Newmont Mining Corp

Analysts downwardly revised their ratings and price targets on Barrick Gold Corporation (USA) (ABX), Goldcorp Inc. (USA) (GG), and Newmont Mining Corp (NEM)

by Alex Eppstein

Published on Oct 14, 2016 at 9:33 AM

Analysts are weighing in on gold stocks Barrick Gold Corporation (USA) (NYSE:ABX)Goldcorp Inc. (USA) (NYSE:GG), and Newmont Mining Corp (NYSE:NEM). Here's a quick roundup of today's bearish brokerage notes on ABX, GG, and NEM.

  • ABX is down 1.1% at $15.83, after Jefferies cut its price target to $20. Still, on a year-to-date basis, the shares have more than doubled in value -- perhaps explaining why options traders have been so bullish of late. Specifically, Barrick Gold Corporation has racked up a 10-day call/put volume ratio of 3.46 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Not only does this ratio reveal long calls have more than tripled puts in recent weeks, it also registers in the high 72nd annual percentile.
  • GG was hit with a price-target cut to $15 at Jefferies, pressuring the shares down 0.9% out of the gate to $14.52. While the gold stock remains 25.6% higher year-to-date, the truth is, it has pulled back dramatically since its early July annual high north of $20 -- echoing a broader theme within the sector. Against this mixed technical backdrop, opinions among analysts are split. Ten brokerage firms currently rate Goldcorp Inc. a "buy" or better, while eight have doled out either a "hold" or a "strong sell" recommendation.
  • NEM has dipped 0.4% this morning to trade at $34.70, and since topping out at a three-year high $46.07 in mid-August, the shares have shed one-quarter of their value. Weighing on the stock is a price-target reduction to $38 at Jefferies. Despite Newmont Mining Corp's recent trouble on the charts, short-term options traders are very call-skewed. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.59 checks in below 89% of all readings taken in the past year -- with calls nearly doubling puts among options expiring in the next three months. Should option bulls start hitting the exits, NEM could face more headwinds.
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