While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Goldcorp (NYSE:GG) slipped 3% today after HSBC Global Research downgraded the gold miner from "overweight" to "neutral".
So what: Along with the downgrade, analyst Patrick Chidley lowered his price target to $30 (from $31.10), representing about 10% worth of upside to yesterday's close. While momentum traders might be attracted the stock's recent surge -- fueled by a solid Q3 -- Chidley believes that recent production setbacks could limit Goldcorp's appreciation potential.
Now what: HSBC sees Goldcorp's risk/reward trade-off as pretty balance at this point. "Although Goldcorp reported strong Q3 results and the impact of cost cutting measures on the bottom line is becoming evident, the Cerro Negro delay and capex blow-out is clearly a setback," HSBC noted. "The project delay and subsequent capex increase, offset somewhat by positive advances on the operating front at several mines, have led to a slight cut in our valuation." Of course, with the stock now off more than 40% from its 52-week highs and sporting a 2% dividend yield, those short-term setbacks might be providing resource-savvy Fools with a golden long-term income opportunity.
Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.