Kinross Sees BMO Lower Target To $11 Following Earnings

On February 16th, Kinross Gold Corp (TSX: K) put out a number of news releases, the first being the fourth quarter dividend amount, which will be US$0.03 per common share.

The second release gives details about their climate change strategy, which includes incorporating energy-efficient and renewable energy projects into their operations, to keep climate change into consideration when making business decisions.

They have set a target for themselves, which is to achieve a 30% reduction in intensity per ounce produced emissions by 2030. They say, “Kinross recognizes the global importance of climate change and the Company’s responsibility to contribute positively to mitigating its impacts, as well as its significance as a strategic matter to the business.”

Then the company announced its 2021 exploration results and fourth quarter/full-year financial results. The company reported that Udinsk and Manh Choh’s feasibility tests should be completed by the third quarter and year-end respectively. While the La Coipa restart is on time and on budget.

Kinross reported fourth quarter results in-line with their own guidance. Gold production came in at 2.07 million ounces, slightly below their 2.1 million guidance, while the all-in sustaining costs were $1,138 versus their $1,110 guidance. The company saw its revenue decrease 11.5% year over year to $3.73 billion, while gross profits decreased almost 30% to $1.16 billion. Net income came in at $221.2 million, down from $1.34 billion last year, putting the companies earnings per share at $0.17.

Kinross Gold currently has 13 analysts covering the stock with an average 12-month price target of C$12.11 or a 65% upside to the current stock price. Out of the 13 analysts, 3 have strong buy ratings, 9 analysts have buy ratings and 1 analyst has a hold rating. The street high 12-month price target comes in at C$16.50, or a 123% upside to the current stock price.

In BMO Capital Markets’ note, they reiterated their outperform rating but lowered their 12-month price target to US$11.00 from US$11.50 saying that the company is progressing through its challenges.

For the companies results, the company beat BMO’s fourth-quarter earnings per share estimate but came in well below both the consensus and their own estimates for everything else.

BMO expects that with Kinross’ continuation of developing their Udinsk project, Russia will remain a hot topic for investors. They also expect Kinross to provide some additional information on Tasiast. They are hoping for new information from management on the insurance settlement and an update on their 24k project.

Below you can see BMO’s updated first quarter and full-year 2021 and 2022 estimates.

Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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