LyondellBasell (LYB) announced its 4Q17 earnings on February 2, 2018. It reported adjusted EPS (earnings per share) of $2.73 compared with analysts’ estimate of $2.55.
At 4:45 AM EST on February 7, the West Texas Intermediate crude oil futures for March 2018 delivery were trading at $63.36 per barrel—a fall of 0.08%.
While aluminum’s (XME) upside could be limited this year after two years of strong gains, there is no reason to expect a sharp fall in prices.
Alcoa (AA) generated free cash flows (or FCF) of $305 million in 4Q17, taking its fiscal 2017 FCF to $819 million.
As of December 31, 2017, Alcoa had a net pension and OPEB (other post-employment benefits) liability of $3.5 billion.
According to the consensus estimates compiled by Thomson Reuters, analysts expect Alcoa to post adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $2.5 billion in 2018.
Alcoa is valued at an enterprise value of 4.5x its 2018 consensus EBITDA and at 4.8x its consensus 2019 EBITDA.
The sell-off in Alcoa’s stock intensified last week amid the correction in broader markets.
Alcoa (AA), the leading US-based integrated aluminum producer, has lost 8.9% so far in 2018 based on February 2 closing prices.
The last few days have been choppy for precious metals and mining companies.
NEM has a whopping 0.97 correlation to gold, while AG has a -0.44 correlation to gold.
The beginning of 2018 has been remarkably strong for precious metals and mining stocks.
Precious metals including gold, silver, and platinum witnessed an up-day in their spot markets on Monday.
Of all the miners we’ve discussed in this series, Agnico Eagle Mines (AEM) has the highest EV-to-forward-EBITDA multiple of 11.6x.
While the YTD (year-to-date) performance of New Gold stock has lagged behind the VanEck Vectors Gold Miners ETF, this situation has reversed in 3Q17.
IAMGOLD (IAG) was the best-performing gold stock of 2017, returning 51.4% for the year.
AEM stock rose 10.0% in 2017, compared with the 12.8% gain seen by the SPDR Gold Shares and the VanEck Vectors Gold Miners ETF’s 11.1% gain.
Yamana Gold’s (AUY) stock almost matched the returns of the VanEck Vectors Gold Miners ETF (GDX) in 2017, returning 11.0% for the year.
Kinross Gold’s stock gained 38.9% in 2017. The VanEck Vectors Gold Miners ETF and the SPDR Gold Shares (GLD) returned 11.1% and 12.8%, respectively.
Goldcorp (GG) also generated negative returns, significantly underperforming the gold miners’ index as well as gold prices (GLD).