BofA Securities took a look at two mining companies’ stock, noting it will be difficult to sustain 10-Year Treasuries above 2.5% and with gold markets “refocusing from tighter monetary policy on limits to interest rate increases, the yellow metal should rally.”
The Gold Thesis: The BofA Commodities team expects the gold price to rise by 5.2% to $1,925 per ounce in 2022 and by 10.4% to $2,049 per ounce in 2023.
BofA On Yamana Gold: Analyst Michael Jalonen upgraded the rating for Yamana Gold Inc (NYSE:AUY) from Neutral to Buy, while keeping the price target unchanged at $6.
“AUY has strong free cash flow which can be used to fund its organic project pipeline, increase shareholder returns and strengthen the balance sheet,” Jalonen said in the note.
BofA On Royal Gold: The analyst also upgraded the rating for Royal Gold, Inc (NASDAQ:RGLD) from Underperform to Neutral, while raising the price target from $108.75 to $125.
The company is “entering a GEO growth phase,” Jalonen said, while adding that the company has “recently increased its annual dividend 17% yoy to $1.40/sh.”