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2 Gold Mining Stocks Poised to Outshine Q3 Earnings Estimates
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The Zacks Mining – Gold industry is housed within the broader Zacks Basic Materials sector. Basic Materials is among the Zacks sectors that are expected to see a rise in earnings for the third quarter. Overall earnings for the space are projected to increase 10.8% on 10.3% higher revenues, per the latest Earnings Preview.
Gold mining companies’ third-quarter results are expected to reflect the benefits of higher gold prices and efforts to boost operating efficiency and reduce costs. We have handpicked two industry players, Barrick Mining Corporation (B - Free Report) and Triple Flag Precious Metals Corp. (TFPM - Free Report) , which are set to beat earnings estimates this time.
How Have Things Shaped Up for These Companies?
Gold prices have racked up strong gains this year as worries over the global trade war have boosted safe-haven demand. Prices hit new highs driven by a surge in safe-haven demand amid the intense trade tussle, geopolitical tensions, a weak dollar and increased purchases by central banks.
The Federal Reserve’s interest rate reduction, hopes of more rate cuts amid concerns over the labor market, along with concerns over a protracted U.S. government shutdown and U.S.-China trade tensions, triggered the recent rally, driving prices north of $4,000 per ton for the first time. Prices of the yellow metal closed nearly 17% higher in the third quarter and have surged roughly 53% this year.
Higher prices are expected to have supported the performance of gold miners in the third quarter. On the flip side, higher mining costs, triggered by inflationary pressure on all aspects of input costs, particularly labor, fuel and electricity, are likely to have been a drag.
Nevertheless, miners remain committed to cutting operational costs and capital spending, improving operating efficiency within existing mines, paying down debt, eliminating non-core assets and concentrating on their highest ore-grade assets. Some of these companies have also taken steps to bring down their all-in sustaining costs — the most important cost metric of miners. These actions are expected to have supported their margins in the third quarter.
How to Pick Winners?
Given the large number of players operating in the gold mining space, picking the right stocks is apparently not an easy task. But our proprietary methodology makes it simple. One can trim the list with the combination of a favorable Zacks Rank — Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — and a positive Zacks Earnings ESP. You can uncover the best stocks to buy or sell before they report with our Earnings ESP Filter.
Earnings ESP — the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate — is our proprietary methodology for determining stocks that have high chances of delivering earnings surprises in their next announcements. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as much as 70%.
Our Choices
Below, we list two stocks that have the right combination of elements to pull off a positive surprise this earnings season:
Barrick Mining has an Earnings ESP of +3.06% and a Zacks Rank #3. It is slated to report on Nov. 10.
Barrick beat the Zacks Consensus Estimate for earnings in two of the last four quarters while missing once and delivering in line results on the other occasion. In this timeframe, it delivered an earnings surprise of roughly 6.7%, on average. The Zacks Consensus Estimate for third-quarter earnings stands at 57 cents. Barrick is expected to have gained from higher average realized gold prices. Higher prices are likely to have offset headwinds from increased production costs, supporting the company’s top line and margins in the third quarter. Higher production is also expected to continue to have driven B’s sales volumes.
Triple Flag Precious Metals beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, it delivered an earnings surprise of 8.1%, on average. It posted an earnings surprise of 14.3% in the last reported quarter. The Zacks Consensus Estimate for third-quarter earnings stands at 22 cents. TFPM is expected to have gained from record-high gold prices and strong metal sales, driving its top line in the third quarter. The start of production at Johnson Camp Mine and Tres Quebradas is also expected to have contributed to its revenues.
Triple Flag Precious Metals Corp. Price and EPS Surprise
Image: Bigstock
2 Gold Mining Stocks Poised to Outshine Q3 Earnings Estimates
The Zacks Mining – Gold industry is housed within the broader Zacks Basic Materials sector. Basic Materials is among the Zacks sectors that are expected to see a rise in earnings for the third quarter. Overall earnings for the space are projected to increase 10.8% on 10.3% higher revenues, per the latest Earnings Preview.
Gold mining companies’ third-quarter results are expected to reflect the benefits of higher gold prices and efforts to boost operating efficiency and reduce costs. We have handpicked two industry players, Barrick Mining Corporation (B - Free Report) and Triple Flag Precious Metals Corp. (TFPM - Free Report) , which are set to beat earnings estimates this time.
How Have Things Shaped Up for These Companies?
Gold prices have racked up strong gains this year as worries over the global trade war have boosted safe-haven demand. Prices hit new highs driven by a surge in safe-haven demand amid the intense trade tussle, geopolitical tensions, a weak dollar and increased purchases by central banks.
The Federal Reserve’s interest rate reduction, hopes of more rate cuts amid concerns over the labor market, along with concerns over a protracted U.S. government shutdown and U.S.-China trade tensions, triggered the recent rally, driving prices north of $4,000 per ton for the first time. Prices of the yellow metal closed nearly 17% higher in the third quarter and have surged roughly 53% this year.
Higher prices are expected to have supported the performance of gold miners in the third quarter. On the flip side, higher mining costs, triggered by inflationary pressure on all aspects of input costs, particularly labor, fuel and electricity, are likely to have been a drag.
Nevertheless, miners remain committed to cutting operational costs and capital spending, improving operating efficiency within existing mines, paying down debt, eliminating non-core assets and concentrating on their highest ore-grade assets. Some of these companies have also taken steps to bring down their all-in sustaining costs — the most important cost metric of miners. These actions are expected to have supported their margins in the third quarter.
How to Pick Winners?
Given the large number of players operating in the gold mining space, picking the right stocks is apparently not an easy task. But our proprietary methodology makes it simple. One can trim the list with the combination of a favorable Zacks Rank — Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — and a positive Zacks Earnings ESP. You can uncover the best stocks to buy or sell before they report with our Earnings ESP Filter.
Earnings ESP — the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate — is our proprietary methodology for determining stocks that have high chances of delivering earnings surprises in their next announcements. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as much as 70%.
Our Choices
Below, we list two stocks that have the right combination of elements to pull off a positive surprise this earnings season:
Barrick Mining has an Earnings ESP of +3.06% and a Zacks Rank #3. It is slated to report on Nov. 10.
Barrick beat the Zacks Consensus Estimate for earnings in two of the last four quarters while missing once and delivering in line results on the other occasion. In this timeframe, it delivered an earnings surprise of roughly 6.7%, on average. The Zacks Consensus Estimate for third-quarter earnings stands at 57 cents. Barrick is expected to have gained from higher average realized gold prices. Higher prices are likely to have offset headwinds from increased production costs, supporting the company’s top line and margins in the third quarter. Higher production is also expected to continue to have driven B’s sales volumes.
Barrick Mining Corporation Price and EPS Surprise
Barrick Mining Corporation price-eps-surprise | Barrick Mining Corporation Quote
Triple Flag Precious Metals has an Earnings ESP of +2.33% and a Zacks Rank #1. It is slated to report on Nov. 4. You can see the complete list of today’s Zacks #1 Rank stocks here.
Triple Flag Precious Metals beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, it delivered an earnings surprise of 8.1%, on average. It posted an earnings surprise of 14.3% in the last reported quarter. The Zacks Consensus Estimate for third-quarter earnings stands at 22 cents. TFPM is expected to have gained from record-high gold prices and strong metal sales, driving its top line in the third quarter. The start of production at Johnson Camp Mine and Tres Quebradas is also expected to have contributed to its revenues.
Triple Flag Precious Metals Corp. Price and EPS Surprise
Triple Flag Precious Metals Corp. price-eps-surprise | Triple Flag Precious Metals Corp. Quote