Bank of America just raised its EUR/USD forecast
On Monday, Citi analyst Alexander Hacking adjusted the price target for Barrick Gold Corp. (NYSE: NYSE:GOLD) shares, increasing it from $17.00 to $21.00, while sustaining a Neutral rating on the stock. Currently trading at $19.14, Barrick has delivered an impressive 24% return year-to-date and is trading near its 52-week high of $21.35. The revision comes as the firm updates its model for Barrick Gold in anticipation of first-quarter 2025 earnings, due on April 30, integrating the latest estimates and Citi’s gold price forecasts. InvestingPro analysis suggests the stock is currently undervalued.
According to Hacking, Barrick Gold is expected to report first-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) of approximately $1.7 billion, aligning with the consensus figure, and earnings per share (EPS) of $0.29, which slightly exceeds the consensus of $0.27 per share. The company’s financial health is rated as GREAT by InvestingPro, with trailing twelve-month EBITDA of $6.15 billion and a solid current ratio of 2.89x. Barrick had previously indicated that the first quarter of 2025 would be the low point for the year due to scheduled maintenance at the Pueblo Viejo (PV) thickener and at the Nevada Gold Mines (NGM), which includes the Gold Quarry and Goldstrike mills.
The PV operation is particularly significant for Barrick Gold’s near-term prospects. If PV can conclude the year with an output rate exceeding 700 thousand ounces per annum, it would be a critical factor for the company’s performance. The rise in gold prices, which have seen nearly a $500 increase per ounce year to date, is expected to substantially benefit Barrick’s pre-tax income, as cost inflation has been relatively contained, barring royalties.
Hacking’s analysis suggests that this increase in gold prices could translate into an approximately 4% additional free cash flow (FCF) yield for Barrick Gold. This is based on the calculation of 4.1 million ounces multiplied by the $500 increase per ounce, adjusted for a 35% tax rate, and divided by the company’s $34 billion market capitalization. At a gold price of $3,000 per ounce, Barrick Gold’s attributable multiples are projected to be 6.0 times enterprise value to EBITDA and a 6% FCF yield, which positions the company as having the lowest multiples among large-cap gold mining companies. Currently trading at an EV/EBITDA of 6.35x and offering a 2.09% dividend yield, Barrick presents an interesting value proposition. For deeper insights into Barrick Gold’s valuation and 8 additional exclusive ProTips, visit InvestingPro to access the comprehensive Pro Research Report.
In other recent news, Barrick Gold Corp. has been in the spotlight with several notable developments. The company reached a pivotal agreement with the Malian government, potentially ending a two-year dispute over the Loulo-Gounkoto mine, with a compensation of approximately $438 million to secure the release of detained employees and resume operations. This agreement is pending formal approval, but it marks a significant step toward stability in Barrick’s West African operations. On the financial front, Raymond (NSE:RYMD) James raised Barrick Gold’s price target to $23.50, maintaining an Outperform rating due to strong cash flow from its gold and copper assets. Jefferies also maintained a Buy rating with a $26.00 target, highlighting potential cost reductions and the value of Barrick’s copper business. UBS upgraded Barrick Gold to a Buy rating, setting a $22.00 price target, citing the company’s attractive valuation and potential growth prospects. These analyst updates reflect a confidence in Barrick’s strategic initiatives and its positioning within the industry. Additionally, Barrick Gold benefited from a surge in gold prices, following Goldman Sachs’ increased gold price forecast, which supports a positive outlook for gold mining companies.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.