On Jan 14, Zacks Investment Research downgraded gold-focused
Royal Gold Inc.
) to a Zacks Rank #5 (Strong Sell).
Royal Gold's royalty revenues stood at $56.5 million in the
first quarter of fiscal 2014 (ending Sep 20, 2013), reported on
Nov 7, 2013, down 27.5% from $77.9 million in the first quarter
of fiscal 2013 and also missing the Zacks Consensus Estimate.
The results were impacted by a lower average gold price of
$1,326 per ounce, down 20% year over year, and lower production
at Voisey's Bay, Penasquito, Las Cruces, Robinson (copper),
Leeville and Cortez. There are a number of economic factors that
influence gold prices. Over the past few years, the price of gold
has shown a high inverse correlation with the U.S. dollar.
Royal Gold posted earnings of 23 cents in the quarter, down
43.9% from the year-ago quarter. It matched the Zacks Consensus
The Pascua Lama project faced more challenges due to halt of
construction activities at the mine, except those required for
environmental protection and regulatory compliance. The restart
will depend on improved project economics.
Moreover, the guidance for the last quarter of calendar year
2013 for the Penasquito mine operated by
) has been narrowed to 370,000-390,000 ounces of gold as Goldcorp
expects higher grade ore to be processed during the quarter.
Royal Gold has delivered negative earnings surprises in the
trailing three of the four quarters with an average negative
surprise of 16.81%.
Following the first quarter earnings release, the Zacks Consensus
Estimate for Royal Gold for fiscal 2014 fell 9.4% to $1.25 per
share. The Zacks Consensus Estimate for fiscal 2015 also declined
9.4% to $1.73.
Other Stocks to Consider
Other companies in the mining industry worth considering
Alexco Resource Corporation
Golden Star Resources, Ltd.
). While Alexco Resource holds a Zacks Rank #1 (Strong Buy),
Golden Star retains a Zacks Rank #2 (Buy).
ALEXCO RESOURCE (AXU): Free Stock Analysis
GOLDCORP INC (GG): Free Stock Analysis Report
GOLDEN STAR RES (GSS): Free Stock Analysis
ROYAL GOLD INC (RGLD): Free Stock Analysis
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