Goldcorp Inc. (GG) Succumbed To The Sellers’ Wrath

Let’s reassess the active stocks with an eye toward GG stock. Just how should we respond to Thursday’s drubbing? Is the mighty fruit now destined to decay? Or is this a mere bruising and nothing more? On 06 December, shares of Goldcorp Inc. (NYSE:GG) closed lower after a volatile session. The shares dropped -0.07 points or -0.74 percent at $9.45 with a heavy trade volume of 10.357 million shares. After opening the session at $9.51, the shares went as high as $9.69 and as low as $9.32, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $8.34 billion and now has 882.6 million shares outstanding. Goldcorp Inc. (GG) stock has lost -0.63 percent of market value in 21 trading days.

GG stock has a trailing 3-year beta of 0.16, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.09 a share in the trailing twelve months. The stock’s value has fallen -26 percent year to date (YTD) against a decline of -23.11 percent in 12 month’s time. The company’s shares still trade -39.23 percent away from its 1-year high of $15.55 and 12.23 percent up from 52-week low of $8.42. The average consensus rating on the company is 2.2, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Goldcorp Inc. (GG) will probably climb 46.88 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $17.5-month high price target. This represents a whopping 85.19 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $14, which represents a return potential of 48.15 percent when compared to the closing price of the stock of $9.45 on Thursday, December 06. The lowest price target for the stock is $8 — slightly more than -15.34 percent from GG’s current share price.

History has shown that shares in Goldcorp Inc. have gone down on 13 different earnings reaction days and are predicted to add 0.05 percent when the company reports upcoming earnings. Investors will get their next glimpse of GG’s Q4 earnings on February 14. Analysts are forecasting revenue to suffer decline of -3.9 percent to $820M in the fiscal fourth quarter, while earnings are seen soaring by nearly -70 percent to $0.03 per share. It earned -$0.08 per share, worse than the -$0.01, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $621M, worse than the $675M analysts expected. Earnings are estimated to increase by 296.8 percent this year, 545.9 percent next year and continue to increase by 6.33 percent annually for the next 5 years.

The stock is currently hovering around the first support level of $9.28. Below this, the next support is placed in the zone of $9.12. Till the time, the GG stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 49.16 on daily chart, which may remain a cause for concern. If the price breaks below $9.12 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $9.65 mark may result into a pull-back move towards $9.86 level.

Shares of Goldcorp Inc. (GG) are trading at a P/E ratio of 24.51 times earnings reported for the past 12 months. The industry GG operates in has an average P/E of 2.08. Its P/E ratio went as low as 17.99X and as high as 70.94 over the 5-year span.Further, it is sporting a 2.68 on the Price-to-Sales ratio. Compare this with the industry average P/S of 3.75. 10.5 percent is the gross profit margin for Goldcorp Inc. and operating margin sits at 8.6 percent. Along with this, the net profit margin is 2.5 percent.