Berenberg Starts Goldcorp (GG) at Hold
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Berenberg initiates coverage on Goldcorp (NYSE: GG) with a Hold rating and a price target of $16.50.
Analyst Yuriy Vlasov commented, "Goldcorp is one of the world’s largest gold producers, generating 3.5moz a year (2015). Its headquarters are in Vancouver, Canada and its stock is listed both in Canada (Toronto) and the US (New York). The company is focused on Americas-based operations, with all of its gold-producing assets situated in Canada, Mexico, Guatemala, Argentina and the Dominican Republic. Its stock trades on a par (2016-17 EV/EBITDA of 9.5-8.8x) with the gold sector (2016-17 EV/EBITDA of 8.5-7.1x) and we see its shares as fully priced."
He added, "All of Goldcorp’s assets are in the Americas, with the majority of its 2016 production set to come from Canada (37%), followed by Mexico (25%), Argentina (20%), the Dominican Republic (14%) and Guatemala (5%). Its reserve base has 37.1moz of gold (on an attributable basis) with head grade of 1.1g/t. We estimate Goldcorp’s production will decline by 14% over 2015-17."
Shares of Goldcorp closed at $16.78 yesterday.
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