Coeur Mining (NYSE: CDE) shares staged a sharp recovery on Friday, closing at $17.39, up 11.1% for the day and 16.6% for the week. The rebound erased nearly all of the losses from Thursday's post-earnings selloff, with the stock ending just four cents below its pre-earnings close.
The two-session swing was dramatic. After closing at $17.43 on Wednesday ahead of results, the stock dropped 10.2% to $15.65 on Thursday, only to bounce back 11.1% on Friday. The volatility underscores that investors distinguished an accounting-related earnings shortfall from the company's record cash generation.
Despite the strong rebound, Coeur lagged its precious metals peers. Pan American Silver (PAAS) rose 6.6% on Friday and 18.8% for the week, while Hecla Mining (HL) gained 6.2% daily and 19.3% weekly. First Majestic Silver (AG) advanced 6.5% and 22.4% respectively. The VanEck Gold Miners ETF (GDX) climbed 7.1% and 21.3%. Coeur's weekly gain was 3.6 percentage points below the peer average and 4.7 points behind GDX, suggesting lingering execution concerns.
The company's Q2 2026 results showed robust underlying performance. Revenue reached $1.0856 billion, more than double the year-ago figure of $480.7 million. Adjusted EBITDA rose to $478.3 million from $213.8 million, and operating cash flow hit $513.2 million, up from $207 million. Free cash flow surged 165% to $387.5 million. Gold production hit a record 163,490 ounces.
However, adjusted EPS of $0.12 missed FactSet consensus of $0.26 by 14 cents. Coeur attributed 10 cents of the shortfall to a noncash purchase-price accounting charge related to Rainy River inventory, representing about 71% of the miss. The same charge increased combined gold costs by $834 per ounce, pushing adjusted gold costs to $2,442 per ounce.
The company's valuation picture improved with cash flow. Coeur projects $1.5 billion in free cash flow for 2026, translating to an 8.4% yield on its $17.88 billion market cap. At quarter-end, cash exceeded debt by approximately $347 million. Through July, Coeur repurchased 6.7 million shares for $121 million, averaging $18.06 per share, about 3.9% above Friday's close.
Despite the positive cash flow, Coeur reduced production guidance for its two new Canadian mines. Total gold output midpoint fell 7.7% to 690,000 ounces, while copper output dropped 21.7% to 45 million pounds. New Afton gold output was cut 21.4% to 55,000 ounces, and Rainy River output by 16.8% to 210,000 ounces. Costs for both mines rose significantly, with New Afton gold costs up 31.8% to $1,450/oz and Rainy River up 26.7% to $2,850/oz. Total capital investment increased 16.8% to $562.5 million, partly due to reclassifying stripping expenses and underground activities.
CEO Mitchell Krebs emphasized expectations for "sharp increases in production levels and free cash flow" in the second half, reaffirming adjusted EBITDA guidance of $2.3 billion and free cash flow of $1.5 billion for 2026.
Analyst sentiment remains positive, with consensus rating of Buy and price target of $23.41, implying 34.6% upside. However, targets range from $18 to $35. Scotiabank's Eric Winmill lowered his target to $26.50 from $28.50 but maintained Outperform.
Investors now look to Wednesday's CPI report, with consensus at 3.4% headline and 2.5% core. Strong data could pressure gold and precious metals stocks.
