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Should You Buy IAMGOLD Gold Stock Ahead of Q3 Earnings Release?
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IAMGOLD Corporation (IAG - Free Report) is expected to deliver a year-over-year improvement in its bottom line when it reports third-quarter 2024 results on Nov. 7, after market close.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for IAG’s earnings has moved up 10% over the past 60 days to 11 cents per share. The consensus mark indicates a significant improvement from the loss of 1 cent per share incurred in the third quarter of 2023.
Image Source: Zacks Investment Research
IAG’s Solid Earnings Surprise History
IAMGOLD’s bottom line beat the Zacks Consensus Estimate in the trailing four quarters. Over the same period, the company has recorded an average surprise of 200%.
Image Source: Zacks Investment Research
What the Zacks Model Unveils for IAG
Our proven model does not conclusively predict an earnings beat for IAMGOLD this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.
Earnings ESP: The Earnings ESP for IAG is 0.00%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Factors Likely to Have Shaped IAG’s Q3 Performance
In the second quarter of 2024, the Essakane mine (wherein IAG has a 90% stake) reported an attributable production of 229,000 ounces, a 27% year-over-year increase due to higher grades. However, production is expected to decline in the second half on lower average head grades, per the mine plan. This is due to the transition of mining activities into the next phase of the pit, with more low-grade stockpile material used to supplement the ore feed.
Gold output at IAG’s fully owned Westwood complex was 67,000 ounces in the first half of 2024, marking a 68% year-over-year increase due to higher grades. This is due to an increased proportion of mill feed from the underground mine, which improved due to ore volume and head grade records achieved in the second quarter of 2024. We expect this momentum to have continued in the third quarter, leading to higher year-over-year production numbers.
On March 31, 2024, the company announced the first gold pour at the Côté Gold mine. The mine is operated as a joint venture between IAG and Sumitomo Metal Mining Co., Ltd., a subsidiary of Sumitomo (SSUMY - Free Report) . The mine delivered its full quarter of production in the second quarter of 2024, contributing 20,000 ounces of gold.
IAMGOLD recently announced that production from the Côté Gold mine was 68,000 gold ounces in the third quarter of 2024 on a 100% basis (or attributable production of 41,000 ounces). The ramp-up of the processing plant has been on track to exit the year at 90% of the design throughput rate of 36,000 tons per day. IAG is set to buy a 9.7% interest in Côté Gold, which will take its stake in the project to 70%.
IAG’s third-quarter production is expected to rise on a year-over-year basis, taking into account the Côté Gold mine’s contribution, higher expected production at Westwood, somewhat offset by lower production at Essakane.
Gold prices averaged $2,491 per ounce in the third quarter, up 29% from the prior-year level. Throughout the quarter, gold prices have been fueled by increasing expectations of interest rate cuts and rising tensions in the Middle East. The Fed’s announcement of a 50-basis-point rate cut at the Sept. 17-Sept. 18 meeting lifted gold prices, which ended the quarter at above 2,600 per ounce.
Higher gold prices and upbeat production numbers are expected to have boosted IAG’s top-line performance.
However, pricing for certain main consumables, including cyanide and grinding media, is expected to have dented IAMGOLD’s margins. Also, at the Côté Gold Mine, operating and capitalized waste stripping unit costs are anticipated to be higher until it achieves a throughput rate of 90%. While these factors are likely to have somewhat dented IAG’s earnings, higher revenues are expected to have offset the impacts.
IAG’s Price Performance & Valuation
Image Source: Zacks Investment Research
The IAG stock has gained 110.8% over the past year compared with the industry’s 37.4% growth. In comparison, the Zacks Basic Materials sector and the S&P 500 have risen 9% and 31.6%, respectively.
Image Source: Zacks Investment Research
IAMGOLD is currently trading at a forward price/sales of 1.43X compared with the industry's 2.85X. The company is also less expensive than other major gold miners like Newmont (NEM - Free Report) , Barrick Gold (GOLD - Free Report) and Agnico Eagle Mines (AEM - Free Report) , which are trading at forward price/sales of 2.77, 2.15 and 4.89, respectively.
Investment Thesis on IAMGOLD
IAG continues to invest in maximizing production and increasing the life of its existing mines, advancing development and exploration projects. Significant operational projects planned for the next years include the Westwood ramp-up to safely access other mining areas affected by the seismic activity in 2020. Plans include mill and plant upgrades, fleet and utilization improvements, tailings and surface water management optimization, and additional pit developments at Essakane. These projects are expected to reduce or control the company’s cost structure and improve efficiency.
Gold prices have gained 33% year to date and are currently at $2,730 per ounce, and demand has been strong. The favorable environment for gold presents a promising outlook for IAG.
Should You Buy IAG Stock Right Now?
While an earnings beat may be uncertain in the quarter under review, IAMGOLD seems set to deliver improved results, supported by the uptrend in gold prices and anticipated production growth. Given its attractive valuation, investing in the IAG stock ahead of its earnings announcement offers a promising opportunity.
IAMGOLD’s long-term prospects, supported by the ongoing ramp-up at Côté Gold, and an established portfolio of early-stage and advanced exploration projects in high-potential mining districts, make it a top stock for investors seeking exposure to gold.
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Should You Buy IAMGOLD Gold Stock Ahead of Q3 Earnings Release?
IAMGOLD Corporation (IAG - Free Report) is expected to deliver a year-over-year improvement in its bottom line when it reports third-quarter 2024 results on Nov. 7, after market close.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for IAG’s earnings has moved up 10% over the past 60 days to 11 cents per share. The consensus mark indicates a significant improvement from the loss of 1 cent per share incurred in the third quarter of 2023.
IAG’s Solid Earnings Surprise History
IAMGOLD’s bottom line beat the Zacks Consensus Estimate in the trailing four quarters. Over the same period, the company has recorded an average surprise of 200%.
Image Source: Zacks Investment Research
What the Zacks Model Unveils for IAG
Our proven model does not conclusively predict an earnings beat for IAMGOLD this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.
Earnings ESP: The Earnings ESP for IAG is 0.00%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: IAMGOLD currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Have Shaped IAG’s Q3 Performance
In the second quarter of 2024, the Essakane mine (wherein IAG has a 90% stake) reported an attributable production of 229,000 ounces, a 27% year-over-year increase due to higher grades. However, production is expected to decline in the second half on lower average head grades, per the mine plan. This is due to the transition of mining activities into the next phase of the pit, with more low-grade stockpile material used to supplement the ore feed.
Gold output at IAG’s fully owned Westwood complex was 67,000 ounces in the first half of 2024, marking a 68% year-over-year increase due to higher grades. This is due to an increased proportion of mill feed from the underground mine, which improved due to ore volume and head grade records achieved in the second quarter of 2024. We expect this momentum to have continued in the third quarter, leading to higher year-over-year production numbers.
On March 31, 2024, the company announced the first gold pour at the Côté Gold mine. The mine is operated as a joint venture between IAG and Sumitomo Metal Mining Co., Ltd., a subsidiary of Sumitomo (SSUMY - Free Report) . The mine delivered its full quarter of production in the second quarter of 2024, contributing 20,000 ounces of gold.
IAMGOLD recently announced that production from the Côté Gold mine was 68,000 gold ounces in the third quarter of 2024 on a 100% basis (or attributable production of 41,000 ounces). The ramp-up of the processing plant has been on track to exit the year at 90% of the design throughput rate of 36,000 tons per day. IAG is set to buy a 9.7% interest in Côté Gold, which will take its stake in the project to 70%.
IAG’s third-quarter production is expected to rise on a year-over-year basis, taking into account the Côté Gold mine’s contribution, higher expected production at Westwood, somewhat offset by lower production at Essakane.
Gold prices averaged $2,491 per ounce in the third quarter, up 29% from the prior-year level. Throughout the quarter, gold prices have been fueled by increasing expectations of interest rate cuts and rising tensions in the Middle East. The Fed’s announcement of a 50-basis-point rate cut at the Sept. 17-Sept. 18 meeting lifted gold prices, which ended the quarter at above 2,600 per ounce.
Higher gold prices and upbeat production numbers are expected to have boosted IAG’s top-line performance.
However, pricing for certain main consumables, including cyanide and grinding media, is expected to have dented IAMGOLD’s margins. Also, at the Côté Gold Mine, operating and capitalized waste stripping unit costs are anticipated to be higher until it achieves a throughput rate of 90%. While these factors are likely to have somewhat dented IAG’s earnings, higher revenues are expected to have offset the impacts.
IAG’s Price Performance & Valuation
Image Source: Zacks Investment Research
The IAG stock has gained 110.8% over the past year compared with the industry’s 37.4% growth. In comparison, the Zacks Basic Materials sector and the S&P 500 have risen 9% and 31.6%, respectively.
Image Source: Zacks Investment Research
IAMGOLD is currently trading at a forward price/sales of 1.43X compared with the industry's 2.85X. The company is also less expensive than other major gold miners like Newmont (NEM - Free Report) , Barrick Gold (GOLD - Free Report) and Agnico Eagle Mines (AEM - Free Report) , which are trading at forward price/sales of 2.77, 2.15 and 4.89, respectively.
Investment Thesis on IAMGOLD
IAG continues to invest in maximizing production and increasing the life of its existing mines, advancing development and exploration projects. Significant operational projects planned for the next years include the Westwood ramp-up to safely access other mining areas affected by the seismic activity in 2020. Plans include mill and plant upgrades, fleet and utilization improvements, tailings and surface water management optimization, and additional pit developments at Essakane. These projects are expected to reduce or control the company’s cost structure and improve efficiency.
Gold prices have gained 33% year to date and are currently at $2,730 per ounce, and demand has been strong. The favorable environment for gold presents a promising outlook for IAG.
Should You Buy IAG Stock Right Now?
While an earnings beat may be uncertain in the quarter under review, IAMGOLD seems set to deliver improved results, supported by the uptrend in gold prices and anticipated production growth. Given its attractive valuation, investing in the IAG stock ahead of its earnings announcement offers a promising opportunity.
IAMGOLD’s long-term prospects, supported by the ongoing ramp-up at Côté Gold, and an established portfolio of early-stage and advanced exploration projects in high-potential mining districts, make it a top stock for investors seeking exposure to gold.