Goldcorp downgraded to "sector perform"

01/10/08 - RBC Capital Markets

NEW YORK, January 10 (newratings.com) - Analysts at RBC Capital Markets downgrade Goldcorp Inc (GG) from "outperform" to "sector perform," while revising their estimates for the company. The target price has been reduced from $39 to $36.

In a research note published yesterday, the analysts mention that the downgrade in the rating follows the recent appreciation in the company’s share price. Goldcorp has issued its gold production guidance for 2008 at 2.6 million ounces, short of the estimates. Given the backdrop of a sustained rise in gold prices, Goldcorp’s stock is unlikely to outperform the peer group, since the company is one of the lower-cost Tier I gold producers, RBC Capital Markets adds. The EPS estimate for 2007 has been raised from $0.48 to $0.49. The EPS estimates for 2008 and 2009 have been reduced from $1.04 to $.85 and from $1.41 to $1.11, respectively.