Centamin Share Price is Soaring Today – Is it Still a Buy?

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Centamin share price is among the best-performing in London today. It is up by more than 1.85% and is trading at 212p, which is the highest it has been since Tuesday last week. This price is below last week’s low of 197p. Other mining companies are mixed today, with Fresnillo share price rising by close to 2%. Glencore shares are barely moved while BHP Group shares are down by more than 1.52%.

Why Centamin Stock Price is Rising

For starters, Centamin is a London-listed company that is mostly involved in gold mining activities. The company operates the biggest gold mining operation in Egypt that is known as the Sukari mine. The firm has a market cap of more than £2.46 billion and annual revenue of more than £652 million in 2019.

In the past few years, Centamin share price has done relatively well. It has gained by 12% in the past three months and by 46% in the past 6 months. In total, the stock has gained by more than 240% in the past five years.

The recent rally in Centamin shares is simple to explain. As a gold miner, the company has benefited from the sharp increase in gold price. To put this into perspective, gold price has soared by more than 70% in the past five years. Year-to-date, the precious metal has gained by more than 30%, making it among the best-performing assets. Therefore, the rise in gold price has led to a sharp rally in Centamin and other gold mining stocks like Newmont Mining, AngloGold, and Barrick Gold.

Gold stocks have risen

Most recently, Centamin share price has risen because of the company’s strong quarter. The firm’s cash profit for the period doubled to more than £196 million after it produced more than 256,084 ounces of gold. The average price of the gold it produced was about $1,657, which was a 27% increase from the same period a year earlier. As a result, the company increased its dividend during the quarter.

Analysts have mixed feeling about Centamin stock price. Those at Jefferies expect the stock to rise to 240p, which is a 13% premium from the current price. Still, others believe that the shares are now overvalued. For example, those at Berenberg expect the shares to drop to 200p while those at Royal Bank of Canada expect it to drop to 200p.

Centamin share price forecast

Centamin Share Price Outlook

The daily chart below shows that Centamin share price is in a strong upward trend today. It reached an intraday high of 213p. The price is above the 50-day and 100-day exponential moving averages. Also, it is above the ascending black trendline that connects the lowest levels on March, June, and August. Therefore, I suspect that the upward trend is likely to continue as buyers attempt to test this year’s high of 234p.

On the flip side, a move below 200p will invalidate this trend. This price is at the intersection of the ascending trend line and the lowest points this month.

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Centamin share price chart

Centamin share price

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