J.P. Morgan Sees Buying Opportunity in Gold Miners, Reiterates Top Picks

A recent 35%-45% pullback in the shares of Europe, Middle East, and Africa (EMEA) gold miners has created a compelling buying opportunity, according to a new analyst note from J.P. Morgan. The bank reaffirmed its positive stance on the sector, highlighting AngloGold Ashanti and Fresnillo as its preferred stocks and placing Gold Fields on a "Positive Catalyst Watch."

Sector Valuation and Gold Outlook

J.P. Morgan's analysts noted that the sector's recent weakness has pushed valuations to a point where they are pricing in long-term gold prices of approximately $3,200 to $3,800 per ounce. This is about 10% below current spot prices and significantly lower than the bank's own forecasts, despite upcoming company-specific catalysts like cash returns and progress on growth projects.

The bank has, however, revised its own gold price expectations downward. Citing reduced exchange-traded fund flows, more measured central bank buying, and subdued physical demand in Asia, J.P. Morgan lowered its year-end 2026 gold price target to $4,500 an ounce from a previous $6,300. Despite the near-term revision, the bank maintains a bullish longer-term outlook for the precious metal.

Key Company Ratings

Ad

J.P. Morgan provided specific outlooks for several key miners in its coverage:

• AngloGold Ashanti: Retained as a top pick due to its potential for near-term cash returns and an inexpensive valuation. Analysts will be watching for updates on production guidance, the ramp-up of its Obuasi mine, and the execution of its $2 billion share buyback program.
• Fresnillo: Also remains a top pick, favored for its cash return potential and re-rating prospects. Key issues for investors include updates on cost inflation and progress on development projects.
• Gold Fields: Placed on Positive Catalyst Watch ahead of its first-half results on August 25. The stock has underperformed peers by about 10% year-to-date, which J.P. Morgan attributes to investor concerns over the potential transfer of control of its Tarkwa mine in Ghana when its lease expires in 2027. The bank believes management updates on negotiations could serve as a positive catalyst for the shares.

Analysts also flagged the possibility of a dividend surprise from Endeavour Mining, forecasting an interim dividend of $1.03 per share, which is above the market consensus.