Iamgold (IAG) Surges 5.08% on RBC Upgrade, Backed by 15% Higher Gold Price Outlook

Iamgold (IAG) surged 5.08% on Thursday, marking a two-day rally with a total gain of 6.15%. The stock hit its highest level since September 2025, with an intraday jump of 5.33%, driven by renewed investor confidence in the gold producer’s growth trajectory. This momentum followed a strategic upgrade from RBC Capital, which highlighted the company’s expanding free cash flow potential and robust exploration results.

RBC Capital analyst Michael Siperco upgraded IAG to “Outperform” on September 9, raising the price target to $14 from $9. The move was anchored in a revised gold price forecast of $3,550/oz, a 15% increase from previous estimates, and the potential for $2.5 billion in free cash flow by 2030. These assumptions underscored IAG’s ability to leverage higher gold prices to fund growth projects at Gosselin, Nelligan, and Monster Lake, where recent drilling extended mineralized zones to nearly 9 million ounces.

Operational developments further bolstered the stock’s performance. The Côté Gold Project, now at full capacity, is projected to generate $1 billion in free cash flow by 2026 through throughput optimization. Meanwhile, Nelligan and Monster Lake projects—100% owned by IAG—showed promising resource expansion, reinforcing the company’s organic growth narrative. These initiatives align with RBC’s emphasis on IAG’s “anchored growth” and reduced risk profile compared to peers.

Analyst sentiment remained cautiously optimistic despite mixed Q2 earnings. While earnings per share of $0.13 fell short of estimates, strong EBITDA margins and a 1.5 current ratio highlighted IAG’s financial discipline. Institutional investors, including Hsbc Holdings and Vanguard, increased stakes in Q2, signaling long-term confidence in the company’s strategic direction. However, risks such as gold price volatility and high capital expenditures for expansion projects remain critical watchpoints for investors.

IAG’s stock volatility, with a beta of 1.21, reflects its sensitivity to macroeconomic factors like inflation and interest rates. While the recent rally aligns with its position as a diversified gold producer across Canada and Burkina Faso, investors must balance near-term earnings fluctuations with the company’s long-term growth potential. The focus on organic development and operational efficiency positions IAG to capitalize on a favorable gold market, provided macroeconomic conditions remain supportive.