JPMorgan initiated coverage on the North American gold sector on Thursday, assigning Barrick Gold Corporation (B.US) an "Overweight" rating with a target price of $68. Concurrently, it gave Agnico Eagle Mines (AEM.US) a "Neutral" rating with a target price of $248. The firm believes gold's short-term and long-term prospects are bullish, supported by central bank purchases and US policy uncertainty. JPMorgan analyst Bennett Moore stated that he views Agnico Eagle Mines as a leader in the sector, with strengths including superior operations, a highly attractive cost structure, and a low-risk geographic footprint. While these advantages command a certain premium, considering that Agnico Eagle's next significant growth phase is primarily focused in the 2030s and its current valuation is relatively saturated, Moore indicated he would await a more favorable entry point. On the other hand, Barrick Gold Corporation possesses a world-class reserve base and strong near-term organic growth potential, but it has a mixed track record, is currently undergoing a management transition, and has operations in higher-risk jurisdictions. Despite this, its stock currently trades at a significant discount to global peers, yet it could see unique positive catalysts ahead, such as the restart or sale of the Loulo-Gounkoto mine and resource updates at the Fourmile project. Both Barrick Gold and Agnico Eagle Mines hit multi-year highs of $54.69 and $225 respectively during early Thursday trading, but subsequently retreated, closing down 1.76% and 3.35% as gold futures pulled back from record highs above $5,500 per ounce.
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