IAMGOLD IAG has reached a significant support level, making it an attractive option for investors from a technical perspective. Yesterday, the IAG stock exceeded its 50-day simple moving average (SMA), signaling a short-term bullish trend. The company’s shares gained 3% yesterday to close at $5.32.
This was driven by IAMGOLD’s third-quarter 2024 results, which were also announced yesterday. Adjusted earnings per share (EPS) of 18 cents beat the Zacks Consensus Estimate and significantly improved from the year-ago quarter’s loss. Revenues surged 95.5% year over year on higher gold sales and prices.
IAG Breaks Out Above 50-Day Moving Average
Image Source: Zacks Investment Research
The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend.
Is it the right time to stock up on shares, or should you book profits? Let us delve deeper into the company’s third-quarter results and fundamentals.
Decoding IAMGOLD’s Q3 Results
Revenues surged 95.5% year over year to $438.9 million in the quarter. The solid rise was attributed to a 59% increase in gold sales to 184,000 ounces and a 23% rise in average realized gold prices.
Attributable gold production increased 58.7% year over year to 173,000 ounces, reflecting strong performances at Essakane (up 19%) and Westwood (up 28%). The Côté Gold mine’s contribution to IAG’s production was 41,000 ounces.
The gross margin soared to 37% in the third quarter of 2024 from 2% in the year-ago quarter. The adjusted EBITDA margin was 50.5% compared with 25.7% in the prior-year quarter.
IAMGOLD’s adjusted earnings per share were 18 cents, which surpassed the Zacks Consensus Estimate of 11 cents by a 63.6% margin. The company had reported a loss of 1 cent per share in the third quarter of 2023.
Key Developments for IAMGOLD in Q3
The Côté Gold Mine achieved multiple milestones in the third quarter, reaching commercial production on Aug. 1, 2024. A shutdown was implemented in September to deploy operating improvements. IAMGOLD affirms that Côté Gold is on track to exit the year with 90% of the design throughput rate of 36,000 tons per day.
IAMGOLD has given a formal notice to Sumitomo Metal Mining Co. Ltd. to repurchase a 9.7% interest in the Côté Gold Mine. It is expected to be completed as of Nov. 30, 2024, taking its stake in the project to 70%.
As of Sept. 30, 2024, IAG had available liquidity of $959.3 million, comprising cash and cash equivalents of $553.4 million, and the available balance of the revolving credit facility of $404.9 million.
IAG Ups Essakane & Westwood Output Targets for 2024
Essakane's 2024 attributable production is expected at the high end of 380,000-410,000 ounces. Westwood’s production is anticipated near the top end of 115,000-130,000 ounces.
IAMGOLD expects 2024 production from the Côté Gold mine near the lower end of 130,000-175,000 ounces (on a 60.3% basis). We expect the mine’s contribution to IAG’s production in 2024 to be higher once the deal to raise its stake to 70% is closed.
Image Source: IAMGOLD
Rising Estimates Instill Confidence in IAG’s Earnings
The Zacks Consensus Estimate for IAMGOLD’s 2024 and 2025 earnings have seen solid revisions over the past 60 days.
Image Source: Zacks Investment Research
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The consensus mark for 2024 and 2025 top and bottom lines suggests year-over-year improvements. This reflects analysts' upbeat expectations for the company’s production potential and gold prices.
Gold prices eased somewhat to the current $2,700 an ounce as markets reacted to the implications of Donald Trump’s Presidency and the latest Fed interest rate decision. Nevertheless, the bullion has gained 30.8% year to date and is set to be one of the top-performing assets this year. Prices will be supported by strong demand, geopolitical tensions and fresh stimulus from China.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
IAMGOLD Shares Exhibit Solid YTD Momentum
Image Source: Zacks Investment Research
The IAG stock has gained 110.3% year to date compared with the industry’s 29.1% growth. In comparison, the Zacks Basic Materials sector and the S&P 500 have risen 1.3% and 25.8%, respectively.
IAMGOLD has also outpaced major gold miners like Newmont NEM, Barrick Gold GOLD and Agnico Eagle Mines AEM, which have yielded gains of 9.1%, 2.1% and 55.9%, respectively.
Solid Projects Support IAG’s Long-Term Prospects
IAG continues to invest in maximizing production and increasing the life of its existing mines, advancing development and exploration projects.
In the first six years of operation, Côté Gold’s expected gold output will likely be 4.95 million ounces and it will average 3.65 million ounces yearly over the life of the mine. In terms of production, this is the third-top gold mine in Canada, following Agnico Eagle’s Detour Lake anda Malartic. The company is also exploring the adjacent Gosselin pit to improve returns from the Côté Gold project.
Significant operational projects planned for the next years include the Westwood ramp-up to safely access other mining areas affected by the seismic activity in 2020. It includes other multi-site infrastructure investments, mill and plant upgrades, fleet and utilization improvements, tailings and surface water management optimization, and additional pit developments at Essakane. These projects are expected to reduce the cost structure and improve efficiency.
The company’s exploration projects, such as Nelligan and Monster Lake in northern Quebec, are also expected to be developed together to make a quality gold mine complex with a low-cost structure and a substantial mine life.
IAG’s Valuation Attractive
IAMGOLD is currently trading at a forward 12-month price-to-sales multiple of 1.43X, lower than the industry's 2.82X. The company is also less expensive than Newmont, Barrick Gold and Agnico Eagle Mines, which are trading at forward price/sales of 2.73, 2.10 and 4.87, respectively.
Image Source: Zacks Investment Research
Final Thoughts on IAMGOLD Stock
IAMGOLD is poised for growth, supported by an upward trend in gold prices, the ongoing ramp-up at Côté Gold, and the solid portfolio of early-stage and advanced exploration projects in high-potential mining districts. Given its attractive valuation and upbeat earnings estimates, IAG is a solid stock to add to one’s portfolio.
IAG currently has a Zacks Rank #2 (Buy) and a VGM Score of B. The VGM Score rates each stock on the combined weighted styles, helping identify the ones with the most attractive value, best growth forecast and most promising momentum across the board.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpNewmont Corporation (NEM) : Free Stock Analysis Report
Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
Iamgold Corporation (IAG) : Free Stock Analysis Report
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
