CIBC Cuts Price Target, Estimates On Kinross Gold
Wednesday, January 25, 2022 10:22 AM

CIBC World Markets Inc. trimmed its price target on Kinross Gold Corp. (TSX:K.TO) (NYSE: KGC) to US$15 from US$20.

Barry Cooper, an analyst at CIBC, said delays to projects and continued uncertainty as to scope and cost of development for several of KGC's key projects have impaired valuations and will hurt company multiples.

Cooper, who has a "Sector Performer" rating on the stock, revised down his 2012 EPS estimate to US$1.10 from US$1.19 and 2013 EPS estimate to US$1.50 from US$1.64.

Tasiast, one of the company's gold-bearing property, carries the biggest burden of change with its value dropping 45% or about $1.76/sh, Cooper wrote. "However, it will remain a key cornerstone to KGC, with initial production over 1mm oz."

Cooper views that delays for FDN and Lobo-Marte properties are less critical in the impact to the share price. FDN needs to have government agreements that are more favorable than those initially outlined. Lobo-Marte is likely only delayed months as he sees its advancement as perhaps the least risky.

While perhaps oversold at these levels, KGC will not have any production growth for more than two years and will be susceptible to rising costs, Cooper said, adding that all of this will hold the stock price in check fundamentally.

However, Cooper said KGC has become a takeover candidate due to its long-life mines.

The stock fell 1.7 percent to $10.40 on the NYSE, while shares slid 1.5 percent on the Toronto Stock Exchange.