It is no secret that gold rallied during the first half of 2016. What still seems like a secret midyear is that there were truly very few gold bulls at the start of 2016 — and some of the key gold stocks have more than doubled in 2016. Now we have one key analyst upgrade and one key analyst downgrade in gold mining stocks.

Yamana Gold Inc. (NYSE: AUY) was trading down nearly 2% at $5.33 Monday morning. This is despite seeing its rating raised to Buy from Hold by HSBC. Yamana’s price target in that call was $7.20, compared with a 52-week range of $1.38 to $5.99 and a consensus analyst price target of $5.69. HSBC’s prior price target was just $5.00.

Eldorado Gold Corp. (NYSE: EGO) is feeling the wrath of a Credit Suisse downgrade. The firm said that investors should wait for the dust to settle, downgrading the stock to Neutral from Outperform. Also lowered was the price target, to $5.25 from $7.00.

Eldorado Gold was last seen trading down over 3% at $4.18 on the news, in a 52-week range of $1.87 to $5.16. Credit Suisse sees an increased near-term risk. Monday’s analyst report said:

In the near term geopolitical headwinds will likely dampen a re-rating from potential upcoming positive catalysts. We reduce our target net asset value multiple to 1.0x from 1.3x, in-line with Eldorado’s 1-year trading average of 0.95x which similarly reflected Greek political risk (recently alleviated). Our cash flow multiple decreases to 18x from 22x. Our net asset value and cash flow estimates are unchanged.

Monday’s report also expressed concerns over Eldorado from the recent failed coup in Turkey and international exposure elsewhere. The report said:

On July 15th, a military coup aimed at overthrowing the democratically elected government in Turkey was unsuccessfully attempted. Subsequently, Turkey’s President Erdogan arrested members of the military and fired or suspended military, judiciary, and educators. On July 20th, the President declared a State of Emergency expected to last three months or less and is aimed at eradicating those complicit in the coup (our understanding from a client conference call held with the Deputy Prime Minister on July 21st). Turkey was seen as a relatively stable operating base for Eldorado, and with the sale of the Chinese assets, is most of the production outside of Greece and 52% of our net asset value.

In our view recent events in Turkey have led to a perception of higher political risk which will likely introduce share performance headwinds and make outperformance unlikely until greater visibility is achieved. Our underlying view of the assets remains unchanged. Ultimately, we expect a re-rating with EGO’s streamlined focus on long life assets and improved relationship with Greece paving the way for growth. Greater visibility on outcomes in Turkey, stability and EGO being unaffected in a meaningful way would lay the groundwork for EGO to eventually close the 0.3x net asset value discount given its growth potential and historically strong operational track record (pre 2014).

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