AP Coeur D'Alene Up on Metals Price Gains Tuesday November 6, 12:42 pm ET Analyst Says Coeur D'Alene Underpriced, Higher Precious Metals Prices Lift Shares
NEW YORK (AP) -- Shares of silver and gold miner Coeur d'Alene Mines Corp. rose in afternoon trading Tuesday, on higher metals prices and a Bear Stearns analyst's comment that the stock is underpriced.
Shares climbed 53 cents, or 13.8 percent, to $4.37. Shares are down about 21 percent in the past 52 weeks, compared to dramatic gains for many other precious metals miners, given rising gold and silver prices.
Michael Dudas, in a client note, reiterated a $5.50 target price and "Outperform" rating on shares.
"At current levels, we do not believe the shares fully reflect the current silver and gold price environment," wrote Dudas. "As a lagging precious metals stock, we expect a sharp recovery as silver prices achieve levels not seen since 1980."
Silver prices are up about 16 percent since the beginning of the year, trading at an eight-month high Tuesday of $15.335 an ounce on Tuesday.
Gold rose 26 percent in the same period, and on Tuesday hit a 27-year high of $825 per ounce. The higher prices boosted the precious metals mining sector.
A weak dollar, rising oil prices and two domestic interest rate hikes in the past two months have fed investor demand for precious metals such as gold, which is considered a hedge against inflation.
Coeur d'Alene on Friday said third-quarter profit fell amid rising costs and lower production. But Dudas noted the company has several promising exploration and new mine projects in its pipeline.
"While results were lower than our expectations, the company continues to make significant progress with long term projects, which we anticipate will positively impact future results," he wrote.
BSG Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
