Key Morningstar Metrics for Kinross Gold
- Fair Value Estimate: C$13.00
- Morningstar Rating: ★
- Morningstar Economic Moat Rating: None
- Morningstar Uncertainty Rating: High
What We Thought of Kinross Gold’s Earnings
Kinross Gold’s K fourth-quarter adjusted net income of USD 810 million or USD 0.67 per share more than tripled on the same quarter in 2024. The stronger gold price more than offset rising unit cash costs and lower volumes. The same factors meant 2025 adjusted EPS nearly tripled to USD 1.84 from a year ago.
Why it matters: The result was better than we expected, driven by a lower effective tax rate. Volume guidance is in line with our estimates, though unit cash cost guidance is lower, and capital expenditure is higher as it invests in its US mines to help maintain current production volumes.
- It announced a 14% increased quarterly dividend of USD 0.04 per share and intends to return 40% of free cash flow to shareholders in 2026, primarily through share repurchases. With a very strong balance sheet, raising the dividend is sensible and preferable to value-decretive share buybacks.
The bottom line: We raise our fair value estimate for no-moat Kinross after incorporating guidance. Shares trade significantly above our intrinsic assessment due to euphoria in the gold market.
- Spot gold of USD 5,200 per ounce is near historical highs, more than double our assumed long-term or midcycle price of about USD 2,050 from 2030 based on our estimate of the marginal cost of production.
- We also think the market may be overlooking what we expect to be lower grades and margins midcycle from 2030. Along with its relatively short reserve life of about a decade, these factors likely account for the significant premium to fair value at which shares trade.
Bulls say: In our bull case, we assume gold averages about USD 5,700 per ounce from 2026 to 2028 and about USD 2,450 midcycle, about 20% above our base-case assumptions. But shares still trade at more than double our bull-case fair value of USD 15.
