Stock of the Day

March 13, 2020

Barrick Gold (GOLD)

$18.31
-$0.52 (-2.7%)
Market Cap: $32.50B

About Barrick Gold

Barrick Gold Corporation is a sector-leading gold and copper producer.  Its shares trade on the New York Stock Exchange under the symbol GOLD and on the Toronto Stock Exchange under the symbol ABX.   In January 2019 Barrick merged with Randgold Resources and in July that year it combined its gold mines in Nevada, USA, with those of Newmont Corporation in a joint venture, Nevada Gold Mines, which is majority-owned and operated by Barrick. Nevada Gold Mines is the world's largest gold mining complex.  Barrick owns and operates six Tier One gold mines:  Cortez, Carlin and Turquoise Ridge in Nevada, Loulo-Gounkoto in Mali, Kibali in the Democratic Republic of Congo and Pueblo Viejo in the Dominican Republic.   It has gold and copper mines and projects in 13 countries in North and South America, Africa, Papua New Guinea and Saudi Arabia. Barrick's diversified portfolio spans the world's most prolific gold districts and is focused on high-margin, long life assets.

Barrick Gold Bull Case

Here are some ways that investors could benefit from investing in Barrick Gold Corp:

  • The current stock price of Barrick Gold Corp is $17.96, which may present a buying opportunity for investors looking for value in the gold sector.
  • Recent earnings reports show that Barrick Gold Corp met consensus estimates with earnings per share of $0.46, indicating stable financial performance.
  • The company has initiated a stock repurchase plan allowing for the buyback of $1.00 billion in shares, suggesting that management believes the stock is undervalued and is committed to enhancing shareholder value.
  • Barrick Gold Corp has a solid dividend yield of approximately 2.23%, providing investors with a steady income stream, which is attractive in uncertain market conditions.
  • With a consensus rating of "Moderate Buy" from analysts, there is a positive outlook for the stock, indicating potential for price appreciation.

Barrick Gold Bear Case

Investors should be bearish about investing in Barrick Gold Corp for these reasons:

  • Several analysts have downgraded their ratings on Barrick Gold Corp, with CIBC and UBS Group both reducing their ratings to "neutral," which may indicate a lack of confidence in the stock's short-term performance.
  • The stock has experienced volatility, with a 52-week low of $14.25, suggesting potential risks for investors if the price continues to decline.
  • Despite a reasonable debt-to-equity ratio of 0.14, any significant downturn in gold prices could impact Barrick Gold Corp's profitability and financial stability.
  • Analysts have varied price targets, with some lowering their expectations, which could create uncertainty regarding the stock's future performance.
  • The company's net margin of 13.19% may not be as robust compared to industry peers, indicating potential challenges in maintaining profitability.

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