Shares of gold miner SSR Mining(NASDAQ: SSRM) surged 8.1% in early-morning trading today, before giving up some of its gains. The gold stock, though, was still trading 4% higher as of noon.
With gold prices recently hitting all-time highs, one analyst believes the yellow metal will continue to rally, making SSR Mining an attractive stock today.
UBS expects gold prices to boom, SSR Mining stock set to more than double
Analysts from UBS upgraded SSR Mining stock's price target to $10.20 per share from $8 a share. With the gold stock trading below $5 per share as of this writing, UBS's new price target implies a stock price jump of more than 100% over the next 12 months.
UBS expects gold prices to hit $2,800 per ounce by the end of 2025, driven by several factors, including macroeconomic and geopolitical uncertainties, which add to gold's appeal as a safe haven asset for investors. It is trading below $2,400 an ounce right now.
With gold prices hitting record highs, UBS also expects consolidation in the gold sector to pick up and expects gold companies to look at potential mergers and acquisitions as they strive to replenish their project pipelines and explore new opportunities.
Should you buy SSR Mining stock now?
UBS expects SSR Mining stock to rally as its key mines -- Marigold in the U.S., Seabee in Canada, and Puna in Argentina -- continue to produce higher amounts of gold and silver amid the gold price boom.
Investors, however, may want to take UBS's views with a grain of salt and be cautious about SSR Mining in the wake of a recent incident that will dent the miner's growth and has sent the gold stock plunging more than 50% so far this year.
SSR Mining suspended operations at its Çöpler gold mine in Turkey after a slip on the heap leach pad caused a landslide that killed nine people. The company is still searching for some of the bodies, and some of the mine's permits now stand suspended.
The key point to note here is that Çöpler was SSR Mining's largest mine and was expected to contribute nearly 38% to the miner's total projected gold equivalent production for 2024. SSR Mining recently slashed its gold production outlook by nearly as much and suspended its quarterly dividend as well as automated share repurchase plan in a bid to preserve cash as it books impairments on Çöpler mine.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
