Shares of Eldorado Gold EGO scaled a new 52-week high of $18.38 on Aug 20 before ending the session lower at $17.92. The upside was fueled by a spike in gold prices.
Eldorado Gold has a market capitalization of $3.7 billion and currently sports a Zacks Rank #1 (Strong Buy).
Shares of the company have gained 38.2% year to date, outpacing the industry’s 28.6% growth and the S&P 500’s 17.7% rise. Meanwhile, the Basic Materials sector has declined 4.2% in the same time frame.
Image Source: Zacks Investment Research
What’s Driving the Stock?
Solid Q2 Results: Eldorado Gold announced second-quarter adjusted earnings per share of 33 cents, which reflected a solid improvement from 5 cents in the year-ago quarter. The upside was driven by higher gold sales and realized gold prices. Revenues surged 30% year over year to $297 million.
The company produced 122,319 ounces of gold in the quarter, up 11.8% from the year-ago quarter. This was driven by a 22% improvement in gold production at Lamaque and 14% at Kisladag.
Gold sales were 121,226 ounces, 10% higher than 110,134 ounces in the second quarter of 2023. The average realized gold price was up 20% year over year to $2,336 per ounce.
Upbeat Outlook: With EGO attaining gold production of 239,430 ounces in the first half of 2024, the company expects gold production to be in the range of 505,000-555,000 ounces for 2024. The midpoint of the range indicates year-over-year growth of 9%. EGO’s continued focus on operational efficiencies and productivity positions it for improved production and lower unit costs for the second half of 2024.
The company expects Lamaque mine gold production to be in the range of 175,000-190,000 ounces. Production in the second half is expected to be stronger than the first half of the year as grades are expected to increase. Gold production at Kisladag is expected to be in the range of 180,000-195,000 ounces. Production is expected to increase in the second half of the year due to higher stacking rates.
Skouries Project on Track: The company stated that 76% of the Skouries project had been completed as of Jun 30, 2024. Detailed engineering is expected to be substantially completed by the end of the third quarter of 2024, with the project on track for the first gold pour in the third quarter of 2025. Commercial production is expected by the end of 2025. The Skouries project is expected to contribute 140,000 ounces of gold annually.
Uptick in Gold Prices: Gold prices have gained 21.8% so far in 2024, surpassing the performance of most major asset classes. Several factors have contributed to this solid performance in 2024, including increased geopolitical tensions, the potential for monetary policy easing and continuous purchasing by central banks. The yellow metal is currently at around $2,510 per ounce supported by increasing bets on U.S interest rate cuts.
Other Stocks to Consider
Other top-ranked stocks from the basic materials space are Carpenter Technology Corporation CRS, IAMGOLD Corporation IAG and Newmont Mining Corporation NEM. Each of these stocks sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share, which indicates 27.85% increase from fiscal 2024. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS shares gained 99.9% year to date.
The Zacks Consensus Estimate for IAMGOLD’s 2024 earnings is pegged at 39 cents per share, which indicates 333% year-over-year growth. The consensus estimate for earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. IAG shares have gained 104% year to date.
The Zacks Consensus Estimate for Newmont’s 2024 earnings is pegged at $2.82 per share, which indicates 75% year-over-year growth. The consensus estimate for earnings has moved 15.6% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 19.2%. NEM shares have gained 24% year to date.
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Newmont Corporation (NEM) : Free Stock Analysis Report
Carpenter Technology Corporation (CRS) : Free Stock Analysis Report
Iamgold Corporation (IAG) : Free Stock Analysis Report
Eldorado Gold Corporation (EGO) : Free Stock Analysis Report
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