Las Chispas And Rochester Will Sustain A Resilient Mining Future

Key Takeaways

• Optimization of new and existing mines, along with robust exploration, is enhancing production, operational efficiency, and reserve longevity, driving sustainable earnings growth.
  
• Strong precious metal prices and industry-leading ESG performance are improving margins, funding access, and positioning for increased shareholder returns and reinvestment.
  
• Heavy reliance on volatile precious metal prices, integration and regulatory risks, and large capital commitments threaten long-term profitability, cash flow stability, and sustainable growth.

Catalysts

Operates as a gold and silver producer in the United States, Canada, and Mexico.

• The integration of Las Chispas and the ramp-up/optimization of the Rochester expansion have created a more balanced, diversified portfolio with higher total gold and silver production, significantly driving revenue growth, adjusted EBITDA, and operating margin as volumes and grades increase while all-in sustaining costs remain relatively flat.
  
• Ongoing robust exploration programs and recent high-grade discoveries at Las Chispas, Palmarejo, and Silvertip are expected to support both reserve replacement and mine life extension, providing long-term earnings visibility and justifying sustained capital investment, positively impacting future revenue streams and asset valuations.
  
• Sustained strengthening in gold and silver prices-driven by increased focus on electrification/energy transition (boosting silver industrial demand) and heightened investor interest in precious metals as a hedge against inflation and currency risk-supports higher realized prices for Coeur's output, directly benefiting future revenue and expanding net margins.
  
• Peer-leading ESG and safety performance, highlighted by Coeur's recognition as the safest U.S. mining company for three consecutive years and the publication of its responsibility report, strengthens the company's access to lower-cost capital and attracts ESG-focused institutional investment, supporting better funding conditions and lower interest expenses.
  
• The company's rapidly improving free cash flow and aggressive deleveraging, with expectations to reach a net debt-to-EBITDA ratio of zero by year-end, open up options for shareholder returns (e.g., buybacks or dividends) and further reinvestment, directly benefitting earnings per share growth and equity valuation.

Coeur Mining Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Coeur Mining's revenue will grow by 16.8% annually over the next 3 years.
• Analysts assume that profit margins will increase from 10.1% today to 29.6% in 3 years time.
• Analysts expect earnings to reach $567.8 million (and earnings per share of $0.57) by about May 2028, up from $121.4 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $843.6 million in earnings, and the most bearish expecting $347 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 16.9x on those 2028 earnings, down from 41.2x today. This future PE is lower than the current PE for the US Metals and Mining industry at 20.1x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.11%, as per the Simply Wall St company report.

Coeur Mining Future Earnings Per Share Growth

Risks

• The company's near-term profitability is currently enhanced by favorable gold and silver prices, but if commodity prices retreat to historical norms or face increased volatility, Coeur's revenue and net margins could decline sharply given its high operational leverage and significant exposure to precious metals prices.
  
• The recent SilverCrest/Las Chispas acquisition brings higher reported earnings and free cash flow, but integration risks and the accounting impacts-such as elevated amortization expense, unwinding of deferred tax liabilities, and higher costs of goods sold as marked-up inventory is processed-could reduce net income growth and distort long-term earnings visibility.
  
• Coeur Mining has a sizable ongoing capital commitment to exploration ($77M–$93M/year) and large-scale projects like Silvertip, with management explicitly targeting a multiyear (potentially five-year) development timeline; any operational setbacks, cost overruns, or failure to achieve resource conversion at these sites could undermine future production volumes and sustainably pressure future cash flows and asset valuations.
  
• The mining sector, particularly in North America and Mexico, faces long-term structural risks from evolving and tightening ESG regulations, permitting hurdles, and potential resource nationalism; these regulatory trends could force higher compliance costs, slow project approvals, and restrict expansion opportunities-ultimately squeezing margins and increasing capital outlays for Coeur.
  
• While recent balance sheet deleveraging has been substantial, Coeur has a track record of elevated leverage and prior cash flow constraints; if operational performance at key mines such as Rochester or Palmarejo falters (due to throughput, grade, or recovery issues), or if inflation in labor and input costs returns, the company may again require debt or equity financing, risking shareholder dilution and limiting sustainable EPS growth.

Valuation

• The analysts have a consensus price target of $9.944 for Coeur Mining based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $12.0, and the most bearish reporting a price target of just $8.5.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.9 billion, earnings will come to $567.8 million, and it would be trading on a PE ratio of 16.9x, assuming you use a discount rate of 7.1%.
  
• Given the current share price of $7.81, the analyst price target of $9.94 is 21.5% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.