We recently published a list of 10 Best Materials Stocks to Buy Right Now. In this article, we are going to take a look at where Eldorado Gold Corporation (NYSE:EGO) stands against other best materials stocks.
As the uncertainty about the US Presidential election faded, market experts are now looking for the sectors expected to benefit from the re-election of President Trump. Donald Trump’s policies on housing, targeting federal lands and reducing regulatory barriers, demonstrate ambitious plans to fuel construction and housing availability, reported Fastmarkets.
Trump’s stance on immigration might also impact the pallet sector. A fall in immigration and expected deportations might result in a tightening of the labor market and wage pressures. Therefore, Fastmarkets reported that there might be a reacceleration in wage growth. That being said, huge deportations might be restricted as business leaders can oppose these regulations due to expectations of labor shortages and higher costs. Therefore, any policy changes might be moderated.
BofA Remains Optimistic on Materials Sector- Here’s Why
Strategists at Bank of America are optimistic about the materials sector. This optimism stems from the expectation of an earnings rebound after the US Fed’s rate-cutting cycle in September. The strategists also pointed out significant underinvestment in manufacturing, including fields such as mining and equipment replacement. They believe that robust decarbonization goals are expected to aid metals, mining, and commodities.
The large bank also cited China’s stimulus program, highlighting that the materials sector had the highest correlation when it comes to the S&P 500’s 11 sectors to the MSCI China Index. Moreover, Wall Street experts opine that the return of Trump’s Presidency is expected to fuel growth momentum for construction, infrastructure, domestic manufacturing, and industrial sectors.
Montgomery Investment Management believes that Trump’s focus on rebuilding America’s infrastructure should result in elevated government spending, which should aid construction companies and materials suppliers. Also, policies that target bringing manufacturing jobs back to the U.S., such as tariffs on imported goods, should support domestic manufacturing companies.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
US Construction Industry Has a Favourable Outlook
As per JLL, the US construction industry is well-placed for a year of measured growth and adaptation in 2025. The company believes that the push for green building practices from local governments and client directives, together with energy efficiency and lower carbon footprints, should continue to shape project requirements.
Also, improvements in the integration of advanced technologies including AI, IoT, and digital twins have been reshaping design, construction, and building management. This should provide opportunities for increased efficiency and value. JLL added that the US construction industry appears to be well-placed for growth and maintaining the right balance between short-term operational efficiency with long-term goals, while adapting to evolving organizational needs and technological advancements, remains crucial.
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Our Methodology
To list the 10 Best Materials Stocks to Buy Right Now, we used a screener and sifted through several online rankings to extract the companies operating in the materials sector. Finally, the stocks were arranged in the ascending order of their average upside potential, as of November 14.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Eldorado Gold Corporation (NYSE:EGO)
Average Upside Potential: 31.7%
Eldorado Gold Corporation (NYSE:EGO) is engaged in the mining, exploration, development, and sale of mineral products mainly in Turkey, Canada, Greece, and Romania.
Wall Street analysts are quite optimistic about Olympias, which is a gold-silver-lead-zinc mine located in the Halkidiki Peninsula in northern Greece. With respect to Olympias, Eldorado Gold Corporation (NYSE:EGO) successfully concluded the CBA negotiations and reached a mutually beneficial agreement with the union workforce. The 3-year agreement, together with higher productivity in its underground operations, supports the 650ktpa expansion. This reflects an increase from 500ktpa, placing Olympias for long-term profitability over the current mine life of 15 years.
In Canada, at Lamaque, progress continues on the Ormaque bulk sample. Eldorado Gold Corporation (NYSE:EGO) started stockpiling material ahead of processing it through the mill in Q4 2024 and remains on track to declare an inaugural reserve later this year. The analysts believe that the company’s long-term growth is expected to be aided by its Skouries project.
Eldorado Gold Corporation (NYSE:EGO) highlighted that Skouries project remains on budget and on schedule. The first production is expected in Q3 2025. Notably, strong progress was made during Q3 2024, with overall project completion currently sitting at 79%. Also, the contract was received for the steel and mechanical installations for the filter building during Q3 2024. In 2024, the expected capital spend was lowered to between $350 million – $380 million from the original guidance of $375 million and $425 million for the Skouries project.
Eldorado Gold Corporation (NYSE:EGO) mentioned that the first production of the copper-gold concentrate is anticipated in Q3 2025, with expected 2025 gold production of between 50,000 to 60,000 ounces and copper production of between 15 to 20 million pounds. The project is on track for commercial production at 2025 end.
CIBC increased the target price on the shares of Eldorado Gold Corporation (NYSE:EGO) from $18.00 to $22.50, giving an “Outperform” rating on 10th July.
Overall, EGO ranks 8th on our list of 10 Best Materials Stocks to Buy Right Now. While we acknowledge the potential of EGO as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than EGO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.