BUY HOLD SELL A+ A A- B+ B B- C+ C C- D+ D D- E+ E E- F HOLD December 3, 2017 HOLD RATING SINCE 02/21/2017 BUSINESS DESCRIPTION Goldcorp Inc. acquires, explores for, develops, and operates precious metal properties in Canada, the United States, Mexico, and Central and South America. It primarily explores for gold, silver, lead, zinc, and copper deposits. Sub-Industry: Weekly Price: (US$) SMA (50) SMA (100) 1 Year 2 Years 22 20 18 STOCK PERFORMANCE (%) 3 Mo. 1 Yr. 3 Yr (Ann) Price Change -5.54-4.17-13.67 GROWTH (%) Last Qtr 12 Mo. 3 Yr CAGR Revenues -5.36-5.87-0.97 Net Income 88.13 112.28 37.60 EPS 85.71 112.05 38.25 RETURN ON EQUITY (%) Ind Avg S&P 500 Q3 2017 3.70 5.81 13.41 Q3 2016-31.54-2.35 11.79 Q3 2015-13.67-0.12 12.91 P/E COMPARISON Rating History SELL HOLD SELL HOLD Volume in Millions 2016 2017 COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History RECOMMENDATION We rate () a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing nesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. 16 14 12 10 100 50 0 20.72 31.80 Ind Avg EPS ANALYSIS¹ ($) Q1-0.17 Q2 0.48 Q3-0.23 Q4-5.14 Q1 0.10 Q2-0.09 Q3 0.07 Q4 0.12 25.45 S&P 500 Q1 0.20 Q2 0.16 Q3 0.13 HIGHLIGHTS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, turned its bottom line around by earning $0.20 versus -$5.06 in the prior year. This year, the market expects an improvement in earnings ($0.41 versus $0.20). Net operating cash flow has increased to $315.00 million or 17.97% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.41%. 2015 2016 NA = not available NM = not meaningful 2017 1 Compustat fiscal year convention is used for all fundamental data items. 's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that 's debt-to-equity ratio is low, the quick ratio, which is currently 0.57, displays a potential problem in covering short-term cash needs. The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Metals & Mining industry and the overall market, 's return on equity is below that of both the industry average and the S&P 500. In its most recent trading session, has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time. PAGE 1
PEER GROUP ANALYSIS REVENUE GROWTH AND EBITDA MARGIN* Revenue Growth (TTM) BVN -7.5% 17.5% IAG UNFAVORABLE 30% NEM GOLD KGC AEM BTG ABX EBITDA Margin (TTM) FAVORABLE FNV RGLD 80% Companies with higher EBITDA margins and revenue growth rates are outperforming companies with lower EBITDA margins and revenue growth rates. Companies for this scatter plot have a market capitalization between $2.5 Billion and $19.7 Billion. Companies with NA or NM values do not appear. *EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization. REVENUE GROWTH AND EARNINGS YIELD Revenue Growth (TTM) BVN -7.5% 17.5% UNFAVORABLE -10% FNV GOLD NEM Earnings Yield (TTM) RGLD KGC AEM BTG FAVORABLE ABX IAG 25% Companies that exhibit both a high earnings yield and high revenue growth are generally more attractive than companies with low revenue growth and low earnings yield. Companies for this scatter plot have revenue growth rates between -5.9% and 17.1%. Companies with NA or NM values do not appear. INDUSTRY ANALYSIS The metals and mining industry is comprised of companies that engage in exploration, mine development, and ore mining. The industry includes precious metals mining for metals such as gold, silver, and platinum aluminum as well as companies mining or processing industrial metals such as steel, copper, & aluminum. The US is the largest producer of primary aluminum and the second largest producer of gold, exporting materials worth over $26 billion annually. According to recent estimates, there are more than 7000 metals and mining firms in the US. The industry is mature, cyclical, capital intensive and dominated by large companies. Fierce consolidation activity has been a key trend since 2005. Some of the major names in the industry are Alcoa Inc. (AA), Century Aluminum Co. (CENX), Kaiser Aluminum Corporation (KALU), Nucor Corporation (NUE), Cliffs Natural Resources Inc. (CLF), and Newmont Mining Corp. (NEM). The US steel industry is currently worth more than $50 billion with annual growth rates around 1% to 2%. Process chains are long with high production volumes. Recently, large quantities of low-cost imports have impeded growth. However, the industry has seen enhanced productivity, energy efficiency, and higher yield due to restructuring, downsizing, and widespread implementation of new technologies. In the coming years, overcapacity and price instability will remain critical issues. Efficient production, better-suited products, enhanced capacity utilization and environmentally friendly practices are vital factors to future success. The US is the largest producer of primary aluminum, exporting $39 billion annually. The aluminum sector is cyclical, mature, capital intensive, and geographically concentrated. Demand comes from transportation, packaging, consumer electronics, construction, aerospace and power companies. The industry is overtly responsive to economic conditions. Companies are responding to pricing pressures through consolidation and vertical integration, which is aimed at streamlining the supply chain. In the US, Nevada accounts for four-fifths of all domestic gold output. Domestic demand for gold has declined as retail jewelry sales have fallen sharply in recent years. However, higher consumption in emerging countries and increased investor demand for gold investment products like ETFs have helped bolster market prices. High gold prices have attracted new players and have prompted existing ones to expand. Future growth for the US metals and mining industry depends upon demand from BRIC nations, developing countries, and domestic consumers. The industry faces a number of challenges including environmental concerns, deteriorating ore grades, overproduction, technological changes, and the global economy. Intense competition from nations such as Canada, Russia, China and Mexico pose threats to the US mining industry because those nations have lower labor costs, lax environmental regulations and lower operating costs. Sustainability of high prices, resurgent global demand, particularly from the Asia-Pacific region, and signs of increasing industrial output across Europe and the United States may boost industry performance. PEER GROUP: Metals & Mining Recent Market Price/ Net Sales Net Income Ticker Company Name Price ($) Cap ($M) Earnings TTM ($M) TTM ($M) 12.64 11,216 20.72 3,468.00 517.00 GOLD RANDGOLD RESOURCES LTD 91.76 8,638 31.11 1,307.99 281.08 RGLD ROYAL GOLD INC 82.72 5,414 53.71 435.34 100.37 KGC KINROSS GOLD CORP 4.16 5,188 41.60 3,395.50 111.30 BVN MINAS BUENAVENTURA SA 13.99 3,846 NM 1,190.88-353.35 IAG IAMGOLD CORP 5.43 2,524 4.98 1,056.30 514.00 BTG B2GOLD CORP 2.54 2,483 254.00 645.88 33.19 NEM NEWMONT MINING CORP 36.99 19,728 246.60 7,202.00 85.00 ABX BARRICK GOLD CORP 13.78 16,067 7.41 8,465.00 2,177.00 FNV FRANCO-NEVADA CORP 81.15 15,072 102.72 662.90 146.70 AEM AGNICO EAGLE MINES LTD 43.71 10,154 37.36 2,176.56 271.44 The peer group comparison is based on Major Gold companies of comparable size. PAGE 2
COMPANY DESCRIPTION Goldcorp Inc. acquires, explores for, develops, and operates precious metal properties in Canada, the United States, Mexico, and Central and South America. It primarily explores for gold, silver, lead, zinc, and copper deposits. The company's principal producing mining properties include the Red Lake, Porcupine, Musselwhite, and Eleonore mines in Canada; the Penasquito mine in Mexico; the Cerro Negro mine in Argentina; and the Pueblo Viejo mine in the Dominican Republic. Goldcorp Inc. was founded in 1954 and is headquartered in Vancouver, Canada. Park Place, Suite 3400, 666 Burrard Street Vancouver, BC V6C2X8 CAN Phone: 604-696-3000 Fax: 604-696-3001 http://www.goldcorp.com STOCK-AT-A-GLANCE Below is a summary of the major fundamental and technical factors we consider when determining our overall recommendation of shares. It is provided in order to give you a deeper understanding of our rating methodology as well as to paint a more complete picture of a stock's strengths and nesses. It is important to note, however, that these factors only tell part of the story. To gain an even more comprehensive understanding of our stance on the stock, these factors must be assessed in combination with the stock s valuation. Please refer to our Valuation section on page 5 for further information. FACTOR SCORE Growth 2.0 out of 5 stars Measures the growth of both the company's income statement and cash flow. On this factor, has a growth score better than 30% of the stocks we rate. Total Return 1.5 out of 5 stars Measures the historical price movement of the stock. The stock performance of this company has beaten 20% of the companies we cover. Efficiency 2.0 out of 5 stars Measures the strength and historic growth of a company's return on invested capital. The company has generated more income per dollar of capital than 30% of the companies we review. Price volatility 1.0 out of 5 stars Measures the volatility of the company's stock price historically. The stock is less volatile than 10% of the stocks we monitor. Solvency 4.5 out of 5 stars Measures the solvency of the company based on several ratios. The company is more solvent than 80% of the companies we analyze. Income 3.0 out of 5 stars Measures dividend yield and payouts to shareholders. The company's dividend is higher than 50% of the companies we track. THESTREET RATINGS RESEARCH METHODOLOGY TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to perform against a general benchmark of the equities market and interest rates. While our model is quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings. Objective elements include volatility of past operating revenues, financial strength, and company cash flows. Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's performance. These and many more derived observations are then combined, ranked, weighted, and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of selecting stocks. PAGE 3
Consensus EPS Estimates² ($) IBES consensus estimates are provided by Thomson Financial FINANCIAL ANALYSIS 's gross profit margin for the third quarter of its fiscal year 2017 has increased when compared to the same period a year ago. Even though sales decreased, the net income has increased. has liquidity. Currently, the Quick Ratio is 0.57 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year. 0.10 Q4 FY17 0.41 E 2017(E) 0.50 E 2018(E) At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 4.60% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. To learn more visit www.thestreetratings.com. INCOME STATEMENT Net Sales ($mil) 866.00 915.00 EBITDA ($mil) 348.00 343.00 EBIT ($mil) 98.00 76.00 Net Income ($mil) 111.00 59.00 BALANCE SHEET Cash & Equiv. ($mil) 195.00 383.00 Total Assets ($mil) 21,938.00 21,587.00 Total Debt ($mil) 2,826.00 2,930.00 Equity ($mil) 13,959.00 13,344.00 PROFITABILITY Gross Profit Margin 47.00% 42.84% EBITDA Margin 40.18% 37.48% Operating Margin 11.32% 8.31% Sales Turnover 0.16 0.17 Return on Assets 2.35% -19.50% Return on Equity 3.70% -31.54% DEBT Current Ratio 1.00 1.77 Debt/Capital 0.17 0.18 Interest Expense 31.00 41.00 Interest Coverage 3.16 1.85 SHARE DATA Shares outstanding (mil) 867 854 Div / share 0.02 0.02 EPS 0.13 0.07 Book value / share 16.10 15.63 Institutional Own % NA NA Avg Daily Volume 6,357,991 6,920,704 2 Sum of quarterly figures may not match annual estimates due to use of median consensus estimates. PAGE 4
RATINGS HISTORY Our rating for has not changed since 2/21/2017. As of 11/30/2017, the stock was trading at a price of which is 29.3% below its 52-week high of $17.87 and 6.1% above its 52-week low of $11.91. 2 Year Chart SELL: $11.81 HOLD: $17.37 2016 SELL: $13.22 HOLD: $17.09 $25 $20 $15 MOST RECENT RATINGS CHANGES Date Price Action From To 2/21/17 $17.09 Upgrade Sell Hold 12/1/16 $13.22 Downgrade Hold Sell 5/20/16 $17.37 Upgrade Sell Hold 11/30/15 $11.81 No Change Sell Sell Price reflects the closing price as of the date listed, if available RATINGS DEFINITIONS & DISTRIBUTION OF THESTREET RATINGS (as of 11/30/2017) 44.19% Buy - We believe that this stock has the opportunity to appreciate and produce a total return of more than 10% over the next 12 months. 30.85% Hold - We do not believe this stock offers conclusive evidence to warrant the purchase or sale of shares at this time and that its likelihood of positive total return is roughly in balance with the risk of loss. 24.96% Sell - We believe that this stock is likely to decline by more than 10% over the next 12 months, with the risk involved too great to compensate for any possible returns. TheStreet Ratings 14 Wall Street, 15th Floor New York, NY 10005 www.thestreet.com Research Contact: 212-321-5381 Sales Contact: 866-321-8726 VALUATION HOLD. The current P/E ratio indicates a significant discount compared to an average of 31.80 for the Metals & Mining industry and a discount compared to the S&P 500 average of 25.45. Conducting a second comparison, its price-to-book ratio of 0.79 indicates a significant discount versus the S&P 500 average of 3.24 and a discount versus the industry average of 1.87. The current price-to-sales ratio is well above the S&P 500 average and above the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, proves to trade at a discount to investment alternatives within the industry. Price/Earnings 20.72 Peers 31.80 Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations. is trading at a significant discount to its peers. Price/Projected Earnings 25.28 Peers 19.08 Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations. is trading at a significant premium to its peers. Price/Book 0.79 Peers 1.87 Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. is trading at a significant discount to its peers. Price/Sales 3.16 Peers 3.01 Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. is trading at a valuation on par with its industry on this measurement. DISCLAIMER: Price/CashFlow 11.63 Peers 12.02 Average. The P/CF ratio, a stock s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. is trading at a valuation on par to its peers. Price to Earnings/Growth 0.18 Peers 0.42 Discount. The PEG ratio is the stock s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. trades at a significant discount to its peers. Earnings Growth lower higher 112.05 Peers 1467.24 Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. However, is expected to significantly trail its peers on the basis of its earnings growth rate. Sales Growth lower higher -5.87 Peers 21.85 Lower. A sales growth rate that trails the industry implies that a company is losing market share. significantly trails its peers on the basis of sales growth The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided via the COMPUSTAT Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as other third-party data providers. TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained in this report constitutes, or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Your use of this report is governed by TheStreet, Inc.'s Terms of Use found at http://www.thestreet.com/static/about/terms-of-use.html. PAGE 5