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Goldcorp Inc.

Goldcorp is now the world's lowest-cost, million-ounce gold producer. The acquisition of Wheaton River Minerals Ltd. has increased gold production, gold reserves and resources and given the company one of the fastest growth curves in the industry. It has strengthened Goldcorp's already solid balance sheet and lowered production costs per ounce even further. Goldcorp is in excellent financial condition. It has no debt, a large treasury, strong cash flow and earnings and pays a dividend 12 times per year. Goldcorp is completely unhedged.

Expert Comments:

"We initiated coverage on Goldcorp Inc. in June and rate it Outperform. We give it a 52-week target price of $22. Its shares began underperforming relative to its peers after weak Q1/15 results were announced. These surprised the market, which immediately began focusing on recent criticisms of the company: It missed guidance from 2014 and its balance sheet suffered through recent very large capital programs. This led to concerns about debt and worries that the company would neither meet its 2015 production guidance nor generate free cash flow. This is a market situation I like to call "maximum ugliness." The reality is that most of the issues Goldcorp was dealing with have been or are being resolved. We expect the company will meet its guidance. We expect it will show free cash flow sufficient to support its dividend, repair its balance sheet and invest in future opportunities. Goldcorp shares are lagging now, but we expect that investors will soon become cognizant of the new realities, and shares will outperform throughout the remainder of 2015.

[Goldcorp has over the last 12 months brought on-stream three new mines: Éléonore in Quebec, Cochenour in Ontario and Cerro Negro in Argentina.] Two of those new mines were declared commercial in Q1/15, and as this new suite of mines ramps up production, there's a real opportunity for investors. These mines can be optimized at higher production rates. They'll have healthy reserve grades for the next couple of years and the capacity to grow over time. Goldcorp shares are suffering now because there were a few hiccups along the path to production, and this wore thin the patience of investors. . .this is a company built on acquisition. You could say that this is in Goldcorp's DNA. It does not invest much in greenfields exploration like some of its peers; it prefers to buy projects it can then develop. I think the Osisko bid hurt Goldcorp shares because investors believed it was too soon, that it should have resolved the problems I mentioned before it started buying. Once investors are persuaded, as we are, that the company has or soon will resolve these problems, they will be more than willing to support future Goldcorp acquisitions." read more >

Adrian Day, Global Analyst (7/20/15)
"Goldcorp Inc. appears to be readying itself for an acquisition, raising approximately CA$1B from the sale of shares in Tahoe Resources Inc., and increasing its line of credit. Tahoe had been thought of as a potential target, but these actions suggest Goldcorp has a larger company in its sights. . .at this price Goldcorp is a good buy."

Canaccord Genuity (7/10/15)
"Q2/15 could be a critical turning point for Goldcorp Inc. . .we continue to forecast a material improvement in profitability sequentially. The weak (weather- and tax-impacted) Q1/15 is forecast to mark the low point of the year. Q2/15 is expected to highlight better performance from the Canadian operations, improving grades at Cerro Negro and Penasquito, and new commercial production from Eleonore. We currently forecast earnings per share of CA$0.05 in Q2/15 versus CA$0.01 adjusted in Q1/15. . .the company's stock remains one of the premier investment vehicles in gold, and we maintain our Buy recommendation."

"Over the last couple of months, we have been buying a lot of companies. The seniors include Goldcorp Inc. It has shown a strong growth profile. Over the last year, it has brought three new mines on-stream: Éléonore in Quebec, Cochenour in Ontario and Cerro Negro in Argentina. It has a good jurisdictional-risk profile, operating as it does mainly in Canada and the Americas. And it has the lowest net debt to market cap of any major mining company at 24%. The sector average is about 47%. Goldcorp is a disciplined company. Remember that after its hostile offer for Osisko Mining, Osisko found white knights in Agnico Eagle Mines and Yamana Gold Goldcorp then raised its offer, but after Agnico and Yamana raised theirs in turn, Goldcorp walked away. That's unusual. Most companies let ego get in the way in battles of this sort. Having increased its line of credit and sold off its shares in Tahoe Resources, Goldcorp is now poised to make a major acquisition." read more >

Phil Russo, Rayleigh Capital (6/15/15)
"We continue to be of the view that Goldcorp Inc.'s movements to enhance its liquidity profile are to support its immediate capital commitments (capex and dividend) and improve its financial flexibility. . .the company presents a compelling deep value play for those investors who can hold for successive quarters in anticipation of incrementally positive news flow ahead. We note that 2015 production guidance was reaffirmed."

Andrew Kaip, BMO Capital Markets (6/15/15)
"In our view, Goldcorp Inc. offers the newest portfolio of low-cost mines among the North American senior gold producers, which will drive $0.8B (5.5% yield) in 2016 estimated free cash flow at the current gold price. An Outperform rating and target price of $22.00 for shares of the company is supported by long-term company fundamentals that will provide investor exposure to reasonable valuations predicated on a portfolio with the capacity to rebuild Goldcorp's balance sheet over the next couple of years."

More Expert Comments

Experts Commenting on This Company

Randall Abramson, Fund Manager – Trapeze Asset Management
Ralph Aldis, Portfolio Manager, Gold and Natural Resources – U.S. Global Investors
Sam Crittenden, Research Analyst – RBC Capital Markets
Adrian Day, Founder – Adrian Day Asset Management
Michael Gray, Analyst – Macquarie Capital Markets
Richard Gray, Analyst – Cormark Securities
Jeb Handwerger, Author Gold Stock Trades
David Haughton – BMO Capital Markets
Louis James, Analyst – Casey Research
Andrew Kaip, Analyst – BMO Capital Markets
John Kaiser, Editor and Publisher – Kaiser Research Online
Alec Kodatsky – CIBC World Markets
Tony Lesiak – Canaccord Genuity
Kevin MacKenzie, Analyst – Salman Partners
Chris Mancini, Research Analyst – Gabelli Gold Fund
David Morgan, Publisher – Silver Investor
Keith Phillips, Managing Director – Cowen & Co.
Phil Russo, Research Associate – Raymond James
Chris Thompson, Mining Analyst – Raymond James
Josh Wolfson, VP, Senior Analyst Gold & Precious Metals – Dundee Capital Markets

The information provided above is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.
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