Goldcorp Inc. (USA) (NYSE:GG) — Goldcorp is one of the world’s largest silver producers but is known primarily as a leading gold producer that focuses primarily on exploration and mining in the Americas. Yesterday gold’s price climbed to its highest level in a month and Goldcorp closed at its highest price since Feb. 27, advancing over 9% since the November election.
Despite the drive higher, Standard & Poor’s on Feb. 17 lowered their view on the shares of Goldcorp to a “hold” from a “buy” but maintained a 12-month target of $19. Their opinion is that the company’s growth strategy is expected to return a 20% increase in gold production but over a five-year period.
However, in mid-March RBC Capital Markets upgraded the stock from “underperform” to “sector perform” and raised its price target to $17 from $15 a share. S&P concedes that an improving price structure, and a strong group of mine holdings with lower geopolitical risk, are an advantage compared to their peers. Their 2017 EPS estimate is 35 cents, up from 31 cents in 2016, and they forecast 50 cents in 2018. It congratulates management for one of the best balance sheets in the industry.
Technically, Goldcorp’s stock is in a bullish “V” recovery following a fall from a double-top at about $20. From a low in December at under $12, it rallied to almost $18 in mid-February before consolidating about $15 this month.
Currently a long-term bullish signal, the “Golden Cross,” is close to being triggered. Yesterday, despite some late profit-taking, GG stock closed above its 200-day moving average at $15.94. Buy GG at $16 with a target of between $18 and $19 for a projected return of between 12% and 16%. A stop-loss should be entered at $14.00.
Tell us what you think about this article! Drop us an email at editor@investorplace.com, chat with us on Twitter at @InvestorPlace or comment on the post on Facebook. Read more about our comments policy here.
