Coeur Mining Needs to Deliver Solid Results to Sustain Its Turnaround

Coeur Mining has had a forgettable year so far, but the stock has made an impressive comeback on the market in the past couple of months. This is despite the fact that Coeur’s first-quarter results were not all that great, with revenue dropping 5% annually because of weak output.

In fact, the company’s loss was wider than anticipated. Still, investors have piled into the stock as its latest rally suggests. That is not surprising as investors expect Coeur to take advantage of the recent turnaround in gold and silver prices. However, whether the company will be able to take advantage of the recovery in precious metals prices or not will be clear once its results are out on Aug. 7.

Tepid Expectations from Coeur

The market doesn’t expect much from Coeur’s second-quarter results. Its revenue is expected to drop nearly 4% year over year, and the company is expected to report a loss of $0.11 per share as compared to a profit of $0.01 per share in the prior-year period.

But the rally in gold and silver prices is expected to be a tailwind for Coeur’s performance in the second half of the year.

Wall Street expects Coeur to deliver top-line growth of 28% in the third quarter, and its loss is expected to shrink from $0.11 per share to $0.05 per share. Coeur sees gold production between 334,000 ounces to 372,000 ounces this year. Silver output is expected to range between 12.2 million ounces and 14.7 million ounces.

For comparison, Coeur had produced 367,000 ounces of gold last year and 12.9 million ounces of silver. This means that the growth in silver production and the recent rally in gold prices will drive the company’s performance in the second half of the year.

Will Coeur Be Able to Deliver a Strong Outlook?

There’s a good chance that Coeur delivers a strong outlook for the remainder of the year. According to the company’s first-quarter press release:

As such, don’t be surprised to see Coeur’s third-quarter outlook turning out to be as bright as Wall Street expects. But if the company fails on that front, the stock is likely to tank.

However, investors shouldn’t ignore another catalyst that Coeur is sitting on. The prices of gold and silver have been on the rise and they can go higher thanks to macroeconomic issues and the Federal Reserve’s actions. As reported by Kitco:

So a combination of higher silver production and a rise in price could turn out to be a tailwind, though investors should wait until the second-quarter results for confirmation of that.