Jefferies upgraded Kinross Gold Corporation (TSX:K) (NYSE:KGC) to “Buy” from “Hold” and raised its price target on the Canadian miner to $18 from $14, citing the company’s strong free cash flow (FCF) profile and potential for sizable share buybacks over the next two years.
“We think Kinross can repurchase (around) 11% of its market cap in 2025/26,” Jefferies analysts wrote in a note to clients, pointing to forecasted FCF yields of 9% in both 2025 and 2026 — well above the 5%-6% range for senior gold peers like Agnico Eagle, Barrick, and Newmont.
The brokerage also highlighted Kinross’ solid cost control and clean asset portfolio, which lacks the remediation liabilities or copper-related capex burdens that weigh on other senior producers.
Jefferies believes Kinross’ strong cash generation will support aggressive buybacks, noting that the company reactivated its repurchase program earlier than expected in the first quarter, with a minimum target of $500 million in 2025. The analysts estimate total buybacks could reach $1.1 billion over 2025 and 2026.
Production stability is also a key factor behind the upgrade. “For Kinross, it's all about maintaining (2 million ounces per annum) production, rather than growing from this level,” the analysts said, adding they see a “clear line of sight” to 2 million ounces of annual output through 2026.
The firm also pointed to upside potential from Kinross’ Great Bear project in Ontario, where exploration below the LP Central Zone could lead to additional resource conversion beyond what was included in the company’s 2024 preliminary economic assessment.
Shares of Kinross gained around 2.7% on Thursday, close to its 12-month high of US$16.01 reached earlier this week.