BMO Capital Markets Likes These Commodities, Stocks

Tuesday January 03, 2017 11:36

(Kitco News) - On the first trading day of 2017, analysts over at BMO Capital Markets are maintaining a “generally constructive view” on commodities.

“We prefer base/bulks producers over precious metals producers, but also see select opportunities emerging in precious metals given the recent sharp declines,” BMO analysts said in a research note on Tuesday.

They highlighted zinc, steel (U.S.), thermal coal and uranium as their preferred commodities.

“We believe most commodities are moving up the recovery curve,” they said, noting that the overly bearish sentiment that plagued the entire commodity complex in late 2015 and early 2016 should be a flash in the past.

On the precious metals front, the bank said it expects, “the macro outlook to continue to cloud a precious metal strategy but recognize that the risk is to the upside given our view that markets are already pricing in the impact of three Fed rate hikes in 2017.”

The bank is remaining constructive on the precious metal equities. However, it is lowering target prices by 23% on average for the precious metals producers under coverage. “Notable downgrades to Market Perform include Goldcorp, Yamana, Kinross, Asanko and Sabina; with SEMAFO the sole upgrade to Outperform.”

Preferred Equities for the bank include: Alamos, Belo Sun, B2Gold, Continental Gold, Detour Gold, Integra Gold, Newmont, Osisko Mining, Royal Gold, SEMAFO, and Silver Standard.