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Does Kinross Gold's 49% Surge in 3 Months Justify Buying it Now?
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Key Takeaways
{\"0\":\"Kinross Gold has surged 49% in three months, outpacing the industry and S&P 500.\",\"1\":\"Projects like Great Bear and Round Mountain Phase X will boost production and cash flow.\",\"2\":\"Despite strong liquidity and debt cuts, rising costs may pressure KGC\'s margins.\"}
Kinross Gold Corporation’s (KGC - Free Report) shares have soared 49% in the past three months, outperforming the Zacks Mining – Gold industry’s growth of 29% and the S&P 500’s rise of 11.4%. The rally in gold prices to record highs, driven by heightened prospects of a U.S. Federal Reserve rate cut and uncertainties surrounding tariffs, has sparked the rise in KGC’s stock price.
KGC’s gold mining peers, Barrick Mining Corporation (B - Free Report) , Newmont Corporation (NEM - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) , have gained 36%, 35.6% and 24.1%, respectively, over the same period.
KGC’s 3-month Price Performance
Image Source: Zacks Investment Research
Technical indicators show that KGC has been trading above the 200-day simple moving average (SMA) since March 6, 2024. The stock is also currently trading above its 50-day SMA. The 50-day SMA continues to read higher than the 200-day moving average, indicating a bullish trend.
Kinross Trades Above 50-Day SMA
Image Source: Zacks Investment Research
Is the time right to buy KGC’s shares for potential upside? Let’s take a look at the stock’s fundamentals.
Key Development Projects to Boost KGC’s Growth
Kinross has a strong production profile and boasts a promising pipeline of exploration and development projects. Its key development projects and exploration programs, including Great Bear in Ontario and Round Mountain Phase X in Nevada, remain on track. These projects are expected to boost production and cash flow and deliver significant value. KGC also completed the commissioning of its Manh Choh project and commenced production during the third quarter of 2024, leading to a substantial increase in cash flow at the Fort Knox operation.
Tasiast and Paracatu, the company’s two biggest assets, remain the key contributors to cash flow generation and production. Tasiast remains the lowest-cost asset within its portfolio, with a consistently strong performance. Tasiast achieved record annual production and cash flow in 2024 and is on track to meet its full-year 2025 guidance. Paracatu continues to deliver strong performance, with second-quarter production rising on higher grades and improved mill recoveries.
Kinross’ Solid Financial Health Bodes Well
KGC has a strong liquidity position and generates substantial cash flows, which allows it to finance its development projects, pay down debt and drive shareholder value. KGC ended second-quarter 2025 with robust liquidity of roughly $2.8 billion, including cash and cash equivalents of more than $1.1 billion. Second-quarter free cash flow surged approximately 87% year over year and 74% from the preceding quarter, driven by the strength in gold prices and strong operating performance.
Kinross repaid $800 million of debt during 2024 and the remaining $200 million of its term loan in the first quarter of 2025. Moreover, KGC's net debt position improved to around $100 million at the end of the second quarter from $540 million in the prior quarter.
Higher gold prices should boost KGC’s profitability and drive cash flow generation. Gold prices are shooting higher this year, largely attributable to aggressive trade policies, including sweeping new import tariffs announced by President Donald Trump that have intensified global trade tensions and heightened investor anxiety. Also, central banks worldwide have been accumulating gold reserves, led by risks arising from Trump’s policies.
Bullion has surged 40% so far this year, with rising hopes of an interest rate cut by the Federal Reserve at the September policy meeting, a weak U.S dollar and tariff-related uncertainties triggering the rally lately, driving prices north of $3,600 per ton for the first time. Concerns over the labor markets have heightened the rate cut expectations. Increased purchases by central banks and geopolitical and trade tensions are expected to help the yellow metal sustain the upswing in gold prices.
Further, KGC offers a dividend yield of 0.5% at the current stock price. It has a payout ratio of 10% (a ratio below 60% is a good indicator that the dividend will be sustainable). Backed by strong cash flows and sound financial health, the company's dividend is perceived as safe and reliable.
Rising Costs a Drag on KGC’s Margins
Kinross saw a roughly 4% year-over-year rise in production costs of sales per ounce to $1,074 in the second quarter. All-in-sustaining costs (AISC), a key indicator of cost efficiency in mining, rose nearly 8% year over year to $1,493 per gold equivalent ounce sold. While a 40% increase in average realized gold prices led to a surge in second-quarter profits, the rise in unit costs underscores a spike in inflation.
KGC’s guidance indicates cost pressures through the end of 2025, with the company expecting full-year AISC per gold equivalent ounce to reach $1,500 and production cash costs to be around $1,120 per ounce. Costs are expected to rise in the remaining quarters of 2025 due to weaker expected production and inflationary impacts. Also, accounting changes to recharacterize stripping costs at certain sites as operating costs are expected to push up unit costs.
Positive Analyst Sentiment for KGC Stock
Earnings estimates for KGC have been rising over the past 60 days, reflecting analysts’ optimism. The Zacks Consensus Estimate for 2025 and 2026 has been revised upward over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $1.38, suggesting year-over-year growth of 102.9%. Earnings are also expected to register roughly 5.2% growth in 2026.
Image Source: Zacks Investment Research
A Look at Kinross Stock’s Valuation
KGC is currently trading at a forward price/earnings of 16.25X, a 4.2% premium compared to the industry’s average of 15.59X. It is trading at a premium to Barrick and Newmont and a discount to Agnico Eagle. Kinross, Barrick and Newmont currently have a Value Score of B each, while Agnico Eagle has a Value Score of D.
KGC’s P/E F12M Vs. Industry, B, NEM & AEM
Image Source: Zacks Investment Research
How Should Investors Play the KGC Stock?
KGC has a strong pipeline of development projects and solid financial health. Rising earnings estimates and a healthy growth trajectory are the other positives. Kinross continues to demonstrate strong financial performance and remains committed to driving shareholder returns. The company is generating solid free cash flow and deleveraging rapidly, benefiting from a favorable gold price environment. However, its higher production costs warrant caution. KGC’s stretched valuation also might not offer an attractive entry point at this time. Holding onto this Zacks Rank #3 (Hold) stock will be prudent for investors who already own it.
Image: Bigstock
Does Kinross Gold's 49% Surge in 3 Months Justify Buying it Now?
Key Takeaways
Kinross Gold Corporation’s (KGC - Free Report) shares have soared 49% in the past three months, outperforming the Zacks Mining – Gold industry’s growth of 29% and the S&P 500’s rise of 11.4%. The rally in gold prices to record highs, driven by heightened prospects of a U.S. Federal Reserve rate cut and uncertainties surrounding tariffs, has sparked the rise in KGC’s stock price.
KGC’s gold mining peers, Barrick Mining Corporation (B - Free Report) , Newmont Corporation (NEM - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) , have gained 36%, 35.6% and 24.1%, respectively, over the same period.
KGC’s 3-month Price Performance
Technical indicators show that KGC has been trading above the 200-day simple moving average (SMA) since March 6, 2024. The stock is also currently trading above its 50-day SMA. The 50-day SMA continues to read higher than the 200-day moving average, indicating a bullish trend.
Kinross Trades Above 50-Day SMA
Is the time right to buy KGC’s shares for potential upside? Let’s take a look at the stock’s fundamentals.
Key Development Projects to Boost KGC’s Growth
Kinross has a strong production profile and boasts a promising pipeline of exploration and development projects. Its key development projects and exploration programs, including Great Bear in Ontario and Round Mountain Phase X in Nevada, remain on track. These projects are expected to boost production and cash flow and deliver significant value. KGC also completed the commissioning of its Manh Choh project and commenced production during the third quarter of 2024, leading to a substantial increase in cash flow at the Fort Knox operation.
Tasiast and Paracatu, the company’s two biggest assets, remain the key contributors to cash flow generation and production. Tasiast remains the lowest-cost asset within its portfolio, with a consistently strong performance. Tasiast achieved record annual production and cash flow in 2024 and is on track to meet its full-year 2025 guidance. Paracatu continues to deliver strong performance, with second-quarter production rising on higher grades and improved mill recoveries.
Kinross’ Solid Financial Health Bodes Well
KGC has a strong liquidity position and generates substantial cash flows, which allows it to finance its development projects, pay down debt and drive shareholder value. KGC ended second-quarter 2025 with robust liquidity of roughly $2.8 billion, including cash and cash equivalents of more than $1.1 billion. Second-quarter free cash flow surged approximately 87% year over year and 74% from the preceding quarter, driven by the strength in gold prices and strong operating performance.
Kinross repaid $800 million of debt during 2024 and the remaining $200 million of its term loan in the first quarter of 2025. Moreover, KGC's net debt position improved to around $100 million at the end of the second quarter from $540 million in the prior quarter.
Higher gold prices should boost KGC’s profitability and drive cash flow generation. Gold prices are shooting higher this year, largely attributable to aggressive trade policies, including sweeping new import tariffs announced by President Donald Trump that have intensified global trade tensions and heightened investor anxiety. Also, central banks worldwide have been accumulating gold reserves, led by risks arising from Trump’s policies.
Bullion has surged 40% so far this year, with rising hopes of an interest rate cut by the Federal Reserve at the September policy meeting, a weak U.S dollar and tariff-related uncertainties triggering the rally lately, driving prices north of $3,600 per ton for the first time. Concerns over the labor markets have heightened the rate cut expectations. Increased purchases by central banks and geopolitical and trade tensions are expected to help the yellow metal sustain the upswing in gold prices.
Further, KGC offers a dividend yield of 0.5% at the current stock price. It has a payout ratio of 10% (a ratio below 60% is a good indicator that the dividend will be sustainable). Backed by strong cash flows and sound financial health, the company's dividend is perceived as safe and reliable.
Rising Costs a Drag on KGC’s Margins
Kinross saw a roughly 4% year-over-year rise in production costs of sales per ounce to $1,074 in the second quarter. All-in-sustaining costs (AISC), a key indicator of cost efficiency in mining, rose nearly 8% year over year to $1,493 per gold equivalent ounce sold. While a 40% increase in average realized gold prices led to a surge in second-quarter profits, the rise in unit costs underscores a spike in inflation.
KGC’s guidance indicates cost pressures through the end of 2025, with the company expecting full-year AISC per gold equivalent ounce to reach $1,500 and production cash costs to be around $1,120 per ounce. Costs are expected to rise in the remaining quarters of 2025 due to weaker expected production and inflationary impacts. Also, accounting changes to recharacterize stripping costs at certain sites as operating costs are expected to push up unit costs.
Positive Analyst Sentiment for KGC Stock
Earnings estimates for KGC have been rising over the past 60 days, reflecting analysts’ optimism. The Zacks Consensus Estimate for 2025 and 2026 has been revised upward over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $1.38, suggesting year-over-year growth of 102.9%. Earnings are also expected to register roughly 5.2% growth in 2026.
A Look at Kinross Stock’s Valuation
KGC is currently trading at a forward price/earnings of 16.25X, a 4.2% premium compared to the industry’s average of 15.59X. It is trading at a premium to Barrick and Newmont and a discount to Agnico Eagle. Kinross, Barrick and Newmont currently have a Value Score of B each, while Agnico Eagle has a Value Score of D.
KGC’s P/E F12M Vs. Industry, B, NEM & AEM
How Should Investors Play the KGC Stock?
KGC has a strong pipeline of development projects and solid financial health. Rising earnings estimates and a healthy growth trajectory are the other positives. Kinross continues to demonstrate strong financial performance and remains committed to driving shareholder returns. The company is generating solid free cash flow and deleveraging rapidly, benefiting from a favorable gold price environment. However, its higher production costs warrant caution. KGC’s stretched valuation also might not offer an attractive entry point at this time. Holding onto this Zacks Rank #3 (Hold) stock will be prudent for investors who already own it.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.