Endeavour Mining named among top performers as Canaccord says gold stocks remain inexpensive
Published: 21:03 14 Feb 2023 GMT
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) was identified among the top performing gold stocks, in a note by analysts at Canaccord, which claims equity valuations in the sector still remain inexpensive.
As the gold price trades about 2% in the year-to-date the S&P/TSX Gold index of stocks is up around 3%.
Canaccord, meanwhile, highlighted that the junior producers are leading with robust performances, up around 9.7% followed by intermediates which are up 6.1% and the senior producers which gained around 1.5%.
“We note that approximately a third of our coverage universe have posted double-digit gains for the year so far,” Canaccord analyst Carey MacRury wrote.
“Top performers in the year to date include Endeavour among the seniors, Centerra Gold Inc. (TSX:CG), Dundee Precious Metals Inc (TSX:DPM), Equinox Gold (TSX:EQX), Aura Minerals Inc. (TSX:ORA), Aris Mining Corp, Asante Gold Corp (CSE:ASE, OTC:ASGOF) among the intermediate/juniors and Wheaton Precious Metals Corp (LSE:WPM, TSX:WPM, NYSE:WPM) among the royalty/streaming companies.
“Equity valuations remain inexpensive in our view with the senior producers trading at 0.76x NAV below their historical average of 0.87x and at the lower end of the 0.74-0.99x range.”
Looking to the upcoming results season, Canaccord’s analysts are optimistic about upcoming results from precious metals companies.
“Q4 tends to be a seasonally strong quarter from a production standpoint,” the broker said.
“We expect Q4 to be the strongest quarter for a number of producers with overall forecast production growth of ~10% relative to Q3/22.”
Most companies have already released fourth-quarter production numbers and investors are now more focused on guidance for 2023.
In particular, investors will be looking for signs that inflation has peaked for key input costs (for energy especially).
The price of gold is more than $130/oz higher than the fourth quarter average of $1,731/oz.
