IAMGOLD Hits 52-Week High: What's Driving the Stock?

Shares of IAMGOLD Corporation IAG scaled a new 52-week high of $5.12 on Aug 16 before ending the session slightly lower at $5.08. The increase was fueled by rising gold prices and IAG's solid second-quarter production numbers and results.

IAMGOLD has a market capitalization of $2.89 billion and currently sports a Zacks Rank #1 (Strong Buy).

Shares of the company have gained 135.2% in the past year, outpacing the industry's 43.6% growth. The S&P 500 has risen 28.3% in the same time frame.

Image Source: Zacks Investment Research

What's Aiding the Stock?

Solid Q2 Results: IAMGOLD announced second-quarter adjusted earnings per share of 16 cents on Aug 8, which reflected a solid improvement from the loss of 1 cent reported in the year-ago quarter. The upside was driven by higher gold sales and realized gold prices. Revenues surged 61.1% year over year to $385 million.

Gold sales were 167,000 ounces on an attributable basis, 38% higher than 121,000 ounces in the second quarter of 2023. The average realized gold price per ounce was up 16% year over year to $2,294.

On Mar 31, 2024, the company announced the first gold pour at the Côté Gold mine. The mine is operated as a joint venture between IAG and Sumitomo Metal Mining Co., Ltd., a subsidiary of Sumitomo SSUMY. The Côté Gold mine reached commercial production on Aug 2, 2024.

The mine's contribution to IAG's production was 20,000 ounces of gold in the second quarter. This took IAG's attributable total production to 166,000 ounces, a 55.1% year-over-year increase.

On May 24, IAG completed a bought deal equity financing of 72 million shares and raised gross proceeds of $300.24 million. Net proceeds will be utilized to repurchase a 9.7% interest in the Côté Gold mine from Sumitomo Metal Mining Co. Ltd., a subsidiary of Sumitomo, restoring its 70% interest in the Côté Gold Mine.

Upbeat Outlook: IAMGOLD expects the Côté Gold mine to produce 220,000-290,000 ounces of gold (on a 100% basis) in 2024.

Strong performances at the Essakane and Westwood mines  also aided solid second-quarter results. The Essakane mine reported attributable production of 111,000 ounces in the second quarter of 2024, a 26.1% year-over-year increase mainly due to higher grades. Westwood's output was 35,000 ounces (up 84% year over year).

The company thus increased Essakane and Westwood's total production guidance to 495,000-540,000 ounces from the prior stated 430,000-490,000 ounces.

Uptick in Gold Prices: Gold prices have been on an upward trend in 2024 as traders see a potential for the Fed to begin lowering rates. Since the start of 2024, gold prices have risen 21.3% and remained consistently above the $2,000-per-ounce mark. Several factors have contributed to this upward trajectory, including increased geopolitical tensions, the potential for monetary policy easing and continuous purchasing by central banks. The yellow metal is currently at an all-time high at around $2,500 per ounce.

Other Stocks to Consider

Some other top-ranked stocks from the basic materials space are Carpenter Technology Corporation and Eldorado Gold Corporation. CRS and EGO sport a Zacks Rank #1 at present.

The Zacks Consensus Estimate for Carpenter Technology's fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for 2025 earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS shares have gained 155.9% in a year.

The Zacks Consensus Estimate for Eldorado Gold's 2024 earnings is pegged at $1.32 per share. The consensus estimate for 2024 earnings has moved 22% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 430%. EGO shares have gained 103% in a year.

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