Since early November, when Randgold Resources (GOLD) delivered a big earnings miss, forward EPS estimates have been slashed, pushing the stock to the cellar of the Zacks Rank again.
In the past 60 days, the Zacks consensus EPS for 2016 was knocked down 11% from $3.28 to $2.92. And full-year 2017 profit projections were also cut just over 10% from $4.20 to $3.77.
It’s no surprise that gold miner earnings and shares should have taken a breather from their terrific rally in the first half of 2016 as the price of the yellow metal, as measured by the SPDR Gold Shares ETF (GLD), started topping this summer and dropping this autumn.
What may be a surprise for gold investors is if the drop continues as interest rates rise and the dollar pushes higher.
Some analysts aren’t too worried. Here’s the group at Clarus Securities after the Randgold earnings miss…
Randgold announced Q3/16 operating and financial results that were below our estimates. Annualized production of 1.17 Moz (million ounces) and total cash costs of $679/oz are slightly below full year 2016 guidance of 1.25 – 1.30 Moz at total cash costs of $590 – $630/oz and we see the need of an exceptional Q4/16 in terms of production and costs to enable the company to meet its full year guidance. We are encouraged by management’s goal to further boost its current production by adding three new projects in the next five years. We maintain our ACCUMULATE rating and target price of US$95.00/share.
Industry Luster
Another way to keep an eye on the story is to watch the companies collectively. You can, of course, do that via the VanEck Gold Miners ETF (GDX). But the best way to watch their collective earnings momentum is through the Zacks Industry Rank.
Currently, Gold Miners are in the bottom 24% of industries at 201 out of 265.
That’s because so many of the miners have negative earnings momentum now after the drop in the commodity. So keep an eye on the Zacks Rank and Industry Rank to let you know which direction the metal and its miners are headed next.
More Stocks to Sell. Now.
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RANDGOLD RSRCS (GOLD): Free Stock Analysis Report
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