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GOLD, KGC, or WPM: Which Gold Stock Could Deliver the Best Returns?
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GOLD, KGC, or WPM: Which Gold Stock Could Deliver the Best Returns?

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Gold prices have been on the rise due to a softer U.S. dollar and expectations of a halt in interest rate hikes, with the possibility of rate cuts next year. Here, we will discuss Wall Street’s reviews about three gold stocks to pick the most attractive one. 

Gold prices hit a six-month high on Monday, thanks to a softer dollar and expectations of a pause in the U.S. Federal Reserve’s rate hikes as well as the possibility of rate cuts next year. Lower interest rates reduce the opportunity cost of holding non-interest-bearing assets like gold and boost their prices. Given this favorable backdrop, we used TipRanks’ Stock Comparison Tool to place Barrick Gold (NYSE:GOLD), Kinross Gold (NYSE:KGC), and Wheaton Precious Metals (NYSE:WPM) to find the best gold stock, as per Wall Street analysts.   

Barrick Gold Stock (NYSE:GOLD)

Barrick Gold boasts the largest portfolio of Tier One gold and copper assets. The company has a robust gold portfolio and is focused on growing its copper portfolio.

Earlier this month, the Canadian gold miner reported better-than-expected Q3 2023 adjusted earnings per share (EPS) of $0.24, reflecting 85% year-over-year growth. The bottom line gained from increased production and higher gold prices. In particular, gold production grew sequentially due to increased output at the company’s mines in Nevada and the Kibali mine in the Democratic Republic of Congo.

Also, it is worth noting that All-in sustaining costs (AISC) for gold, a key metric that indicates total expenses associated with production, was $1,255 per ounce in Q3 2023, compared with $1,355 in the Q2 2023 and $1,269 in the prior-year quarter.

Looking ahead, Barrick expects its gold and copper output to be stronger in Q4 2023. That said, the company expects its gold production for 2023 to be marginally below the low end of its outlook range of 4.2 to 4.6 million ounces, partly due to the slow ramp up at the Pueblo Viejo mine in the Dominican Republic.

Is Barrick Gold a Good Stock to Buy?

Reacting to the Q3 print, BMO Capital analyst Jackie Przybylowski reiterated a Buy rating on November 3 with a price target of $27.  The analyst noted that the company continues to execute its long-term plan to optimize its existing assets. While Barrick’s full-year results are now expected to be at the low end of its guidance, Przybylowski noted that management remains optimistic about projects such as Pueblo-Viejo, which are expected to deliver value in 2024 and in the longer term.

Overall, Barrick Gold scores a Strong Buy consensus rating based on seven Buys and two Holds. The average price target of $21.01 implies 20.5% upside potential. Shares are up just 1.5% year-to-date.

Kinross Gold Stock (NYSE:KGC)

Gold miner Kinross Gold is a gold mining company with a diverse portfolio of mines and projects in the U.S., Canada, Brazil, Chile, and Mauritania.

Kinross reported upbeat third-quarter results, fueled by higher production and a rise in average realized gold price. The 11% rise in third-quarter production to 585,449 Au eq. oz. was due to higher mill grades, recovery and throughput at Tasiast, higher production at La Coipa and  Paracatu mines. However, AISC from continuing operations per (Au eq. oz. sold) increased to $1,296 in Q3 2023 from $1,282 in the prior-year quarter.

Meanwhile, the company assured investors that it is on track to meet its full-year outlook ranges for production, cost of sales per ounce, and AISC. Management also highlighted that the company continues to strengthen its balance sheet by bringing down debt and has completed its expansion projects at Tasiast and La Coipa mines.

What is the Price Target for Kinross Gold Stock?

On November 9, BMO Capital’s Przybylowski reiterated a Buy rating on Kinross Gold with a price target of $6.50. The analyst noted delivered upbeat Q3 results, thanks to the solid performance at Tasiast and Paracatu mines.

Przybylowski pointed out that Kinross provided a positive update for the Round Mountain optimized Phase S project, which extends the life of the mine. He also pointed out that other projects are still on track, mainly Manh Choh is still expected to achieve initial production in the second half of 2024, while Great Bear exploration continues to make great progress.

With five Buys and two Holds, Kinross Gold stock earns a Moderate Buy consensus rating. The average price target of $5.91 indicates that shares are fully valued. KGC stock has rallied 44 so far in 2023.

Wheaton Precious Metals Stock (NYSE:WPM)

Wheaton is a precious metals streaming company that has streaming agreements for 18 operating mines and 14 development-stage projects. Streaming companies generally provide financing to miners and have agreements to purchase some or all of their production at a pre-determined price.

The company delivered mixed third-quarter results, with earnings surpassing expectations while revenue fell short of estimates. Adjusted EPS grew about 29% year-over-year to $0.27, driven by a 2% rise in revenue to $223 million, gross margin expansion, and higher interest income.

The top line was adversely impacted by significantly lower sales from the company’s Penasquito silver stream due to a workers’ strike. Higher metal prices and solid performance of the gold stream at Salobo and gold and silver streams helped offset the impact of the strike. Despite the strike, the company reiterated its 2023 annual production outlook of 600,000 to 660,000 gold equivalent ounces.

Is Wheaton Precious Metals a Good Buy?

On November 13, Berenberg Bank analyst Richard Hatch increased his price target to $61 from $58 and maintained a Buy rating on the stock. The analyst called Wheaton his favorite way to gain exposure to precious metals from a risk perspective, as its streaming business model has operational and gold price exposure across 14 streams, without the additional risk of operating expenses inflation, capex inflation or currency exposure.

Wall Street’s Strong Buy consensus rating on WPM stock is based on eight Buys and one Hold. The average price target of $52 implies nearly 6% upside potential. Shares have risen nearly 26% year-to-date.

Conclusion

Wall Street is highly bullish on Barrick Gold and Wheaton Precious but cautiously optimistic about Kinross. While Barrick stock has underperformed the other two gold stocks year-to-date, analysts predict solid upside potential in the months ahead.

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