Royal Gold Shares Dip 5% Despite Reporting Earnings Beat in Q3

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.

The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.

Zacks Premium includes access to the Zacks Style Scores as well.

What are the Zacks Style Scores?

The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.

The Style Scores are broken down into four categories:

Value Score

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth Score

While good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum Score

Momentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.

VGM Score

If you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank

The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +25.41% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only as a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Kinross Gold (KGC)

Based in Ontario, Canada, Kinross Gold Corporation is involved in the exploration and operation of gold mines. It ranks among the top 10 gold mining companies in the world, with a 2023 production of around 2.1 million gold equivalent ounces. The company's operations are primarily located in - the Americas (roughly 71% of 2023 production). It holds major assets in Canada and the United States. It is mainly involved in the exploration and operation of gold mines. Kinross also produces and sells silver.

KGC is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.

Additionally, the company could be a top pick for growth investors. KGC has a Growth Style Score of A, forecasting year-over-year earnings growth of 56.8% for the current fiscal year.

Six analysts revised their earnings estimate upwards in the last 60 days for fiscal 2024. The Zacks Consensus Estimate has increased $0.09 to $0.69 per share. KGC boasts an average earnings surprise of 32.5%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, KGC should be on investors' short list.

Zacks Investment Research

Shares of B2Gold Corp BTG have dipped 12% since it registered year-over-year declines in its top and bottom lines in its third-quarter 2024 results on Nov. 6. The downside was led by the decrease in gold ounces sold for the company in the quarter due to lower production at the Fekola mine.

BTG reported adjusted earnings per share (EPS) of 2 cents for third-quarter 2024, missing the Zacks Consensus Estimate of 5 cents. The reported figure marked a year-over-year plunge of 60%.

Including one-time items, BTG incurred a loss of 48 cents per share, wider than the prior-year quarter’s loss of 3 cents.

B2Gold generated revenues of $448 million in third-quarter 2024 compared with the prior-year quarter’s $478 million. The 29.3% increase in average realized gold prices was partially offset by a 27.5% fall in gold ounces sold in the quarter. In the September-end quarter, B2Gold recorded a consolidated gold production of 180,553 ounces, down 19.8% year over year.

In the third quarter, the Fekola mine's production fell short of expectations due to the delayed access to high-grade ore, leading to reduced processing of high-grade material.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

BTG’s Q3 Margins Dip Y/Y, Costs Rise

The company reported total consolidated cash operating costs of $1,061 per ounce in the reported quarter, up 40.5% year over year. Total consolidated all-in-sustaining costs of $1,650 per ounce were 30% higher than the prior-year quarter.

In the July-September quarter, the cost of sales was $313 million, up 2% year over year. The gross profit fell 20.9% year over year to $135 million. The gross margin fell to 30.1% in the reported quarter from the prior-year quarter’s 35.7%.

B2Gold Corp Price, Consensus and EPS Surprise

B2Gold Corp price-consensus-eps-surprise-chart | B2Gold Corp Quote

The operating loss in the reported quarter was $562 million against the prior-year quarter’s operating income of $27.5 million.

B2Gold’s Q3 Cash Flow & Balance Sheet Update

BTG’s cash and cash equivalents were $431 million at the end of the third quarter compared with $307 million at the end of 2023. The company used $16 million in cash from operating activities in the September-end quarter against a cash inflow of $110 million in the year-ago quarter.

B2Gold’s long-term debt was $222 million at the end of the third quarter compared with $176 million at the end of 2023.

BTG’s 2024 Outlook

B2Gold expects 2024 total gold production at the low end of 800,000-870,000 ounces (including 20,000 ounces of attributable production from Calibre). B2Gold’s production in 2023 was 1,061,060 ounces (which included 68,717 ounces of attributable production from Calibre).

B2Gold’s Price Performance

In the past year, B2Gold’s shares have lost 2.2% against the industry’s growth of 49.7%.

BTG’s Zacks Rank

B2Gold currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

B2Gold’s Peer Performances in Q3

Agnico Eagle Mines Limited AEM reported third-quarter 2024 adjusted earnings of $1.14 per share, up from 44 cents in the year-ago quarter. The bottom line topped the Zacks Consensus Estimate of 98 cents.

AEM generated revenues of $2.16 billion, up 31.2% year over year. The top line surpassed the Zacks Consensus Estimate of $1.83 billion.

Barrick Gold Corporation GOLD posted third-quarter 2024 adjusted earnings per share of 31 cents. The figure missed the Zacks Consensus Estimate of 33 cents.

Barrick Gold recorded total revenues of $3,368 million, up 17.7% year over year. Total gold production was 943,000 ounces in the quarter, down 9.2% year over year.

Kinross Gold Corporation’s KGC third-quarter 2024 adjusted earnings per share were 24 cents compared with 12 cents in the prior-year quarter. It beat the Zacks Consensus Estimate of 18 cents.

KGC’s revenues rose 29.9% year over year to $1,432 million, surpassing the Zacks Consensus Estimate of $1,186.7 million. The company benefited from higher average realized gold prices.

Zacks Investment Research

Shares of Franco-Nevada Corporation FNV have dipped 11% since it registered year-over-year declines in its top and bottom lines in third-quarter results on Nov. 6. The downside was led by lower contributions from Candelaria, Antapaccay and Energy assets, partially offset by record gold prices. The results were also impacted by the Cobre Panama mine remaining on preservation and safe management during the current period.

FNV reported adjusted earnings of 80 cents per share in third-quarter 2024, missing the Zacks Consensus Estimate of 83 cents. The bottom line decreased 12% year over year.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The company generated revenues of $276 million in the reported quarter, down 10.9% year over year.

Franco-Nevada Corporation Price, Consensus and EPS Surprise

Franco-Nevada Corporation price-consensus-eps-surprise-chart | Franco-Nevada Corporation Quote

In the September-end quarter, 76.8% of revenues were sourced from Precious Metal assets (64.5% gold, 10.3% silver and 2% platinum group metals).

The company sold 84,377 Gold Equivalent Ounces (GEOs) from precious metal assets in the reported quarter, down from the prior-year quarter’s 90,370 GEOs. The downside was led by lower contributions from Candelaria and Antapaccay. This was partially offset by higher contributions from Subika, the recently constructed Tocantinzinho and Greenstone

Mines, and the recently acquired Yanacocha royalty.

In the reported quarter, adjusted EBITDA was down 7.4% year over year to $236 million. The adjusted EBITDA margin was 85.7% in the quarter under review.

FNV’s Q3 Financial Position

The company had $1.32 billion cash in hand at the end of the third quarter of 2024, down from the $1.42 billion as of the end of 2023. It recorded an operating cash flow of $587 million in the first nine months of 2024, down from $708 million in the prior-year period.

Franco-Nevada is debt-free and uses its free cash flow to expand its portfolio and pay out dividends. FNV has an available capital of $2.3 billion.

Franco-Nevada’s Price Performance

The company’s shares have gained 1.1% in the past year compared with the industry’s growth of 49.6%.

FNV’s Zacks Rank

Franco-Nevada currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Franco-Nevada’s Peer Performances in Q3

Agnico Eagle Mines Limited AEM reported third-quarter 2024 adjusted earnings of $1.14 per share, up from 44 cents in the year-ago quarter. The bottom line topped the Zacks Consensus Estimate of 98 cents.

AEM generated revenues of $2.16 billion, up 31.2% year over year. The top line surpassed the Zacks Consensus Estimate of $1.83 billion.

Barrick Gold Corporation GOLD posted third-quarter 2024 adjusted earnings per share of 31 cents. The figure missed the Zacks Consensus Estimate of 33 cents.

Barrick Gold recorded total revenues of $3,368 million, up 17.7% year over year. Total gold production was 943,000 ounces in the quarter, down 9.2% year over year.

Kinross Gold Corporation’s KGC third-quarter 2024 adjusted earnings per share were 24 cents compared with 12 cents in the prior-year quarter. It beat the Zacks Consensus Estimate of 18 cents.

KGC’s revenues rose 29.9% year over year to $1,432 million, surpassing the Zacks Consensus Estimate of $1,186.7 million. The company benefited from higher average realized gold prices.

Zacks Investment Research

The Basic Materials group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Has Kinross Gold (KGC) been one of those stocks this year? A quick glance at the company's year-to-date performance in comparison to the rest of the Basic Materials sector should help us answer this question.

Kinross Gold is a member of the Basic Materials sector. This group includes 235 individual stocks and currently holds a Zacks Sector Rank of #12. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst.

The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. Kinross Gold is currently sporting a Zacks Rank of #2 (Buy).

Within the past quarter, the Zacks Consensus Estimate for KGC's full-year earnings has moved 20.3% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.

According to our latest data, KGC has moved about 56.2% on a year-to-date basis. In comparison, Basic Materials companies have returned an average of -2.1%. As we can see, Kinross Gold is performing better than its sector in the calendar year.

Rayonier Advanced Materials (RYAM) is another Basic Materials stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 146.4%.

In Rayonier Advanced Materials' case, the consensus EPS estimate for the current year increased 77.8% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).

Looking more specifically, Kinross Gold belongs to the Mining - Gold industry, a group that includes 38 individual stocks and currently sits at #21 in the Zacks Industry Rank. This group has gained an average of 14.3% so far this year, so KGC is performing better in this area.

On the other hand, Rayonier Advanced Materials belongs to the Paper and Related Products industry. This 11-stock industry is currently ranked #192. The industry has moved +40.7% year to date.

Going forward, investors interested in Basic Materials stocks should continue to pay close attention to Kinross Gold and Rayonier Advanced Materials as they could maintain their solid performance.

Zacks Investment Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Barrick Gold (GOLD). GOLD is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 10.21 right now. For comparison, its industry sports an average P/E of 13.21. Over the past 52 weeks, GOLD's Forward P/E has been as high as 22.29 and as low as 10.19, with a median of 14.28.

We also note that GOLD holds a PEG ratio of 0.31. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GOLD's industry currently sports an average PEG of 0.45. Over the last 12 months, GOLD's PEG has been as high as 1.56 and as low as 0.31, with a median of 0.98.

We should also highlight that GOLD has a P/B ratio of 1. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.71. Over the past 12 months, GOLD's P/B has been as high as 1.14 and as low as 0.77, with a median of 0.94.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GOLD has a P/S ratio of 2.61. This compares to its industry's average P/S of 2.99.

Finally, we should also recognize that GOLD has a P/CF ratio of 9.21. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. GOLD's current P/CF looks attractive when compared to its industry's average P/CF of 16.69. Over the past 52 weeks, GOLD's P/CF has been as high as 15.14 and as low as 7.45, with a median of 8.95.

Kinross Gold (KGC) may be another strong Mining - Gold stock to add to your shortlist. KGC is a # 1 (Strong Buy) stock with a Value grade of A.

Shares of Kinross Gold currently holds a Forward P/E ratio of 12.71, and its PEG ratio is 0.43. In comparison, its industry sports average P/E and PEG ratios of 13.21 and 0.45.

Over the past year, KGC's P/E has been as high as 19, as low as 11.72, with a median of 14.17; its PEG ratio has been as high as 2.13, as low as 0.39, with a median of 0.98 during the same time period.

Kinross Gold also has a P/B ratio of 2.04 compared to its industry's price-to-book ratio of 1.71. Over the past year, its P/B ratio has been as high as 2.05, as low as 0.95, with a median of 1.39.

These are only a few of the key metrics included in Barrick Gold and Kinross Gold strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, GOLD and KGC look like an impressive value stock at the moment.

Zacks Investment Research