Brokerage Boosts Gold Stock Price Targets After Recent Rise

AU, GFI, and HMY are lower with gold prices today

Jul 5, 2019 at 12:39 PM
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Gold futures are trading lower today as the U.S. dollar strengthens following this morning's jobs report, putting the August-dated contract on track to snap its two-week win streak. However, the commodity tagged a five-year peak on Wednesday, and the recent run up in gold has boosted several mining stocks, including AngloGold Ashanti Limited (NYSE:AU), Gold Fields Limited (NYSE:GFI), and Harmony Gold Mining Co. (NYSE:HMY) -- all of which received price-target hikes at J.P. Morgan Securities overnight.

Overbought AngloGold Ashanti Retreats After Bull Note

The brokerage firm boosted its AngloGold Ashanti price target to $22.90 from $16.50, representing expected upside of 28.7% to Wednesday's close at $17.79. J.P. Morgan Securities also tapped AU as one of its top gold picks. Nevertheless, the shares are trading down 3.6% at $17.15 today.

Heading into today's trading, AU stock was up nearly 58% from its mid-May lows near $11.30, and hit a two-year peak at $18.01 on June 28. As such, the security's 14-day Relative Strength Index (RSI) closed at 71 on Wednesday, in overbought territory at 71, suggesting a short-term pullback may have been in the cards.

Most analysts are already bullish on AngloGold Ashanti, with three of five brokerages maintaining a "buy" or better rating. However, the average 12-month price target of $17.28 is in line with current levels, meaning there's room for more upwardly revised price targets to come down the pike.

Gold Fields Stock Finds Support

J.P. Morgan Securities lifted its price target on Gold Fields to $5.50 from $4.20, a slim 6.2% premium to Wednesday's settlement  at $5.18. Today, the shares are down 3.6% at $4.99, but remain 47.2% higher on a year-to-date basis. And while GFI stock has shed 13.2% from its June 25 two-year high at $5.75, its 30-day moving average is emerging as potential support.

Analysts are overwhelmingly bearish on GFI shares, though, with all four in coverage calling the stock a "hold" or worse. Meanwhile, the consensus 12-month price target of $5 is a slight discount to Gold Fields stock's current price.

Analysts See New Highs for Harmony Gold Mining

Harmony Gold Mining was also named as one of J.P. Morgan Securities' top gold picks, with the brokerage firm raising its price target on the shares to $3.80 from $1.80 -- a nearly 69% premium to Wednesday's close at $2.25. Sector headwinds have HMY shares down 2% today at $2.20, but they remain 25.7% higher year-to-date.

The shares tapped an annual high of $2.31 on June 25, and the brokerage bunch sees higher highs for the gold stock. Specifically, the average 12-month price target for HMY is $2.57, in territory not charted since April 2017. Meanwhile, two-thirds of covering analysts say the equity is a "strong buy."


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