Shares of Alamos Gold Inc AGI 8.41%
are up more than 2.7 percent on Friday, following an upgrade at
Canaccord. In a report, analysts Rahul Paul and Alex Pernin boosted
their rating from Hold to Buy, while trimming their price target from
C$9.00 to C$8.50.
The new rating and price target seek to reflect the recent share price weakness (the stock fell more than 31 percent year-to-date, and more than 13 percent over the past week), which has created the opportunity for a 39 percent upside.
Related Link: 5 Junior Gold Miners Trading At Less Than $110 Per Ounce
After the company merged with its equal AuRico Gold Inc NYSEAUQ, the analysts at Canaccord started viewing the MergeCo as a “higher-quality intermediate gold producer, combining Alamos' strong balance sheet, AuRico's attractive asset base (underpinned by the Young-Davidson mine in Ontario) and Alamos' current growth pipeline.”
At current valuations, the experts see potential for additional multiple expansion at Alamos, longer term, based on:
1) The successful overhaul at the San Carlos underground operation.
2) The concession of the forestry and operating permits necessary for the Turkish assets to operate.
3) An ameliorated consolidated cash cost profile, which in part responds to the start of production at the La Yaqui and Cerro Pelon satellite deposits.
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The new rating and price target seek to reflect the recent share price weakness (the stock fell more than 31 percent year-to-date, and more than 13 percent over the past week), which has created the opportunity for a 39 percent upside.
Related Link: 5 Junior Gold Miners Trading At Less Than $110 Per Ounce
After the company merged with its equal AuRico Gold Inc NYSEAUQ, the analysts at Canaccord started viewing the MergeCo as a “higher-quality intermediate gold producer, combining Alamos' strong balance sheet, AuRico's attractive asset base (underpinned by the Young-Davidson mine in Ontario) and Alamos' current growth pipeline.”
At current valuations, the experts see potential for additional multiple expansion at Alamos, longer term, based on:
1) The successful overhaul at the San Carlos underground operation.
2) The concession of the forestry and operating permits necessary for the Turkish assets to operate.
3) An ameliorated consolidated cash cost profile, which in part responds to the start of production at the La Yaqui and Cerro Pelon satellite deposits.
Latest Ratings for AGI
| Date | Firm | Action | From | To |
|---|---|---|---|---|
| Aug 2015 | CIBC | Upgrades | Sector Outperformer | Sector Perform |
| Aug 2015 | Scotiabank | Upgrades | Sector Outperform | |
| Aug 2015 | Scotia Howard Weil | Upgrades | Sector Perform | Outperform |
View the Latest Analyst Ratings
Posted-In: Alex Pernin CanaccordAnalyst Color Upgrades Price Target Commodities Markets Analyst Ratings
not investment advice.
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