First Majestic Silver (NYSE:AG) Shares Gap Up - Should You Buy?

Key Points

• First Majestic Silver shares jumped from a $18.48 close to a $19.80 open and last traded near $20.16. Analysts maintain a “Moderate Buy” consensus with an average price target of $23.83.
• The company’s latest quarter showed strong year-over-year revenue growth of 57.3%, but it missed expectations on both earnings and revenue, reporting $0.21 EPS versus $0.25 expected and $415.5 million in revenue versus $496 million estimated.
• First Majestic reduced its quarterly dividend to $0.0152 per share, equivalent to a 0.3% annual yield. Institutional ownership stands at 27.16%, with several major investors increasing their positions.

First Majestic Silver Corp. (NYSE:AG - Get Free Report) TSE: FR gapped up prior to trading on Wednesday . The stock had previously closed at $18.48, but opened at $19.80. First Majestic Silver shares last traded at $20.1590, with a volume of 3,035,073 shares changing hands.

Analysts Set New Price Targets

AG has been the topic of a number of recent analyst reports. HC Wainwright lifted their price objective on shares of First Majestic Silver from $26.00 to $27.00 and gave the company a "buy" rating in a research note on Friday, July 31st. Weiss Ratings lowered First Majestic Silver from a "hold (c+)" rating to a "hold (c)" rating in a report on Friday, June 5th. Scotiabank decreased their price target on First Majestic Silver from $23.00 to $22.50 and set a "sector perform" rating for the company in a research note on Tuesday, July 14th. ATB Cormark Capital Markets raised First Majestic Silver from a "hold" rating to a "moderate buy" rating in a research report on Friday, July 10th. Finally, Wall Street Zen lowered shares of First Majestic Silver from a "buy" rating to a "hold" rating in a report on Saturday, July 25th. One research analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and three have given a Hold rating to the stock. According to MarketBeat, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $23.83.

First Majestic Silver Price Performance

The company's 50-day moving average price is $17.16 and its 200-day moving average price is $20.38. The company has a market cap of $10.17 billion, a P/E ratio of 29.06 and a beta of 0.94. The company has a debt-to-equity ratio of 0.08, a current ratio of 2.57 and a quick ratio of 2.38.

First Majestic Silver (NYSE:AG - Get Free Report) TSE: FR last released its earnings results on Thursday, July 30th. The mining company reported $0.21 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.25 by ($0.04). The company had revenue of $415.50 million during the quarter, compared to analyst estimates of $496.00 million. First Majestic Silver had a net margin of 21.18% and a return on equity of 13.36%. First Majestic Silver's revenue was up 57.3% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.11 EPS. As a group, sell-side analysts predict that First Majestic Silver Corp. will post 0.81 earnings per share for the current fiscal year.

First Majestic Silver Cuts Dividend

The company also recently declared a quarterly dividend, which will be paid on Monday, August 31st. Stockholders of record on Friday, August 14th will be issued a dividend of $0.0152 per share. This represents a $0.06 dividend on an annualized basis and a dividend yield of 0.3%. The ex-dividend date of this dividend is Friday, August 14th. First Majestic Silver's dividend payout ratio is 8.45%.

Institutional Inflows and Outflows

Large investors have recently added to or reduced their stakes in the business. Royal Bank of Canada increased its holdings in First Majestic Silver by 77.4% in the first quarter. Royal Bank of Canada now owns 604,186 shares of the mining company's stock worth $4,042,000 after purchasing an additional 263,688 shares in the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its stake in shares of First Majestic Silver by 355.7% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 1,193,589 shares of the mining company's stock worth $7,985,000 after acquiring an additional 931,690 shares during the period. Geode Capital Management LLC raised its stake in shares of First Majestic Silver by 12.4% during the 2nd quarter. Geode Capital Management LLC now owns 240,083 shares of the mining company's stock valued at $1,994,000 after purchasing an additional 26,553 shares during the period. Creative Planning raised its holdings in shares of First Majestic Silver by 25.3% in the 2nd quarter. Creative Planning now owns 28,837 shares of the mining company's stock valued at $238,000 after acquiring an additional 5,828 shares in the last quarter. Finally, Franklin Resources Inc. raised its position in First Majestic Silver by 12.8% during the second quarter. Franklin Resources Inc. now owns 25,940 shares of the mining company's stock valued at $215,000 after purchasing an additional 2,936 shares in the last quarter. Institutional investors own 27.16% of the company's stock.

About First Majestic Silver

First Majestic Silver Corp. NYSE: AG engages in the production of silver from its wholly owned operations in Mexico. Headquartered in Vancouver, British Columbia, the company focuses on acquiring, developing and operating high-grade silver projects. Established in 2002, First Majestic has built a multi-mine portfolio to supply silver primarily for the global industrial and investment markets while generating by-products such as gold, lead and zinc concentrates.

First Majestic’s principal operations are located in the historic Mexican Silver Belt, with producing mines including La Encantada in Coahuila, Santa Elena in Sonora and La Parrilla in Durango.

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