SSR Mining stock rose sharply Friday morning after UBS analyst George Eadie raised his price target for the gold miner to $42. The stock, which was trading under $27 per share as of Friday morning, could see 56% returns if Eadie's projections hold over the next year.
The move came as gold prices weakened. The metal, which topped $5,248 per ounce before the war with Iran began, has since fallen to $4,564.60 per ounce — a loss of 13%. SSR Mining, however, has dropped 17% in the same time frame, creating a gap between the price of the commodity and the company's shares.
Analysts see buying opportunity in gold stocks
Wells Fargo analysts said in a note Friday that gold could return to its January high of $5,600 per ounce and potentially climb further. The firm expects global tensions to drive demand for gold as a safe-haven asset, making the current low prices for gold stocks look like an entry point for investors.
SSR Mining trades at a steep discount
SSR Mining is priced at just 12.4 times its past earnings. If gold prices rebound, the stock is positioned to benefit. Analysts expect the company's earnings to grow at a 16.5% annual rate over the next five years. At current valuations, many investors see upside potential.
Rich Smith, a financial analyst, holds a position in SSR Mining, according to the Nasdaq report. He and others believe the stock is trading at a level that doesn't reflect its long-term potential.