Randgold Resources is trading at 4641p, up 2.6%, after both Morgan Stanley and JP Morgan Cazenove wrote a buy note for the mining company. Analysts have described the correlation between the price of the underlying metal and the company’s share price as the ‘gold war’: generally the two will move in tandem, but not always. Although both brokerage houses believe Randgold is strong, they have disagreed when it comes to price targets. Morgan Stanley gives a price target of 4900p, whereas JP Morgan Cazenove has cut its price target from 6250p to 5020p.
Some investors may see it as a negative sign that JP Morgan Cazenove has reduced its target price, but the new figure is still above the current market price. Analysts at Morgan Stanley warned that the price of gold may lose more ground in the future, but investors should be ‘overweight’ Randgold Resources as they feel it is well positioned to ‘outperform in the current environment’.