Shares of Iamgold Corp. (IAG, Financial) were up 20 cents, or 3.5%, yesterday and closed at $5.96 following the news BMO Capital Markets upgraded the Canadian mid-tier gold producer from market perform to outperform, as shown in the chart below.
Source: Yahoo Finance
This is the stock's fourth upgrade in the last 10 years. BMO Capital’s upgrade was preceded by one from Credit Suisse on May 10 and by TD Securities on Aug. 11, 2016 and Canaccord Genuity on Oct. 19, 2016.
Before its most recent rating, Iamgold was downgraded by Credit Suisse at the beginning of 2017.
The Canadian firm set a new target price of $7.50 per share, which represents a 25% increase from the previous target price of $6 per share and nearly 26% upside from the current market valuation.
Source: Yahoo Finance
With this upgrade, Iamgold’s average target price is now $6.85 per share. Thirteen analysts’ estimates range between a low of $5.50 and a high of $7.96 per share.
It is not surprising Iamgold received another upgrade in just three months. The miner reported important drilling results from exploration activities it is undertaking at several of its projects, which will give new nourishment to the company’s production in the near future, and has enhanced its financial flexibility throught corporate loan refinancing, which reduces the company's leverage and makes the business less exposed to the volatility of the gold market.
The company's solid second-quarter 2017 results likely also played a role in BMO Capital's upgrade.Ă‚
The recommendation rating is currently 2.3 out of a total of 10. This means the average analyst recommends buying shares of Iamgold. The stock is currently trading around $5.96 per share with a market capitalization of $2.739 billion, a price-book (P/B) ratio 1.23, a price-sales (P/S) ratio of 2.56 and an EV/Ebitda ratio of 2.60.
Disclosure: I do not have any positions in Iamgold Corp.
