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Should You Buy Barrick Gold Stock Ahead of Q3 Earnings Report?
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Barrick Gold Corporation (GOLD - Free Report) is slated to come up with third-quarter 2024 results before the opening bell on Nov. 7. The company’s performance is expected to reflect higher gold prices and steady gold production.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for third-quarter earnings has been revised 5.7% downward in the past 30 days. The consensus estimate for earnings is pegged at 33 cents per share, suggesting a 37.5% year-over-year rise.
Image Source: Zacks Investment Research
GOLD beat the Zacks Consensus Estimate for earnings in each of the last four quarters at an average of roughly 21.2%.
Image Source: Zacks Investment Research
Q3 Earnings Whispers for GOLD Stock
Our proven model does not conclusively predict an earnings beat for GOLD this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Higher gold prices are likely to have supported the company’s performance in the September quarter. Gold prices are hitting record highs this year, and the yellow metal has been among the best-performing assets. The recent rally in gold prices has been supported by the 50-basis-point cut in interest rates by the U.S. Federal Reserve, growing expectations of another rate reduction in November, uncertainties over the U.S. presidential election, and increased tensions in the Middle East, which fueled safe-haven demand. Prices of the yellow metal racked up a roughly 4% gain for the third quarter of 2024 and are up roughly 33% this year.
Steady gold production is also expected to have aided GOLD in the third quarter, Barrick said last month that its preliminary third-quarter gold production was consistent with the prior quarter. Pueblo Viejo production improved 23% sequentially due to continuing plant optimization, while North Mara had a stronger quarter due to higher grades. Production from Turquoise Ridge improved from the second quarter, with stronger underground mining performance more than compensating for the Sage autoclave's planned shutdown in the third quarter.
Preliminary third-quarter copper output was higher than the prior quarter, owing mostly to increased grades and recoveries at Lumwana following improved ore access caused by a ramp-up in stripping efforts in the second quarter.
Barrick Stock’s Price Performance and Valuation
GOLD’s stock is up 4.5% year to date, underperforming the the Zacks Mining – Gold industry’s 29.7% increase and the S&P 500’s rise of 20.5%. It has underperformed its peers, Newmont Corporation (NEM - Free Report) , Kinross Gold Corporation (KGC - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) , which have racked up gains of 10.4%, 64.6% and 56.6%, respectively.
GOLD’s YTD Stock Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, GOLD is currently trading at a forward 12-month earnings multiple of 10.47X, lower than its five-year median. This represents a roughly 22.9% discount when stacked up with the industry average of 13.59X.
Image Source: Zacks Investment Research
Investment Thesis for GOLD Stock
Barrick is well-positioned to benefit from the progress in key growth projects that should significantly contribute to its production. Its major gold and copper growth projects are advancing per schedule and within budget, which underpins the next generation of profitable production. The restart of the Porgera mine would offer further upside, supporting the company’s planned production ramp-up through 2024.
Barrick has a robust liquidity position and generates healthy cash flows, which position it well to take advantage of attractive development, exploration and acquisition opportunities, as well as drive shareholder value and reduce debt. Surging gold prices should translate into strong profit margins and free cash flow generation.
Final Thoughts: Buy GOLD Shares
With a strong pipeline of growth projects, solid financial health, healthy growth trajectory and favorable gold market conditions, GOLD stock presents a compelling investment case ahead of its earnings announcement for those seeking exposure to the gold mining space. Backed by a positive earnings outlook, GOLD is a prudent choice to bet on for those looking to capitalize on the gold rush.
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Should You Buy Barrick Gold Stock Ahead of Q3 Earnings Report?
Barrick Gold Corporation (GOLD - Free Report) is slated to come up with third-quarter 2024 results before the opening bell on Nov. 7. The company’s performance is expected to reflect higher gold prices and steady gold production.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for third-quarter earnings has been revised 5.7% downward in the past 30 days. The consensus estimate for earnings is pegged at 33 cents per share, suggesting a 37.5% year-over-year rise.
GOLD beat the Zacks Consensus Estimate for earnings in each of the last four quarters at an average of roughly 21.2%.
Q3 Earnings Whispers for GOLD Stock
Our proven model does not conclusively predict an earnings beat for GOLD this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Barrick has an Earnings ESP of -2.54% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping GOLD’s Q3 Results
Higher gold prices are likely to have supported the company’s performance in the September quarter. Gold prices are hitting record highs this year, and the yellow metal has been among the best-performing assets. The recent rally in gold prices has been supported by the 50-basis-point cut in interest rates by the U.S. Federal Reserve, growing expectations of another rate reduction in November, uncertainties over the U.S. presidential election, and increased tensions in the Middle East, which fueled safe-haven demand. Prices of the yellow metal racked up a roughly 4% gain for the third quarter of 2024 and are up roughly 33% this year.
Steady gold production is also expected to have aided GOLD in the third quarter, Barrick said last month that its preliminary third-quarter gold production was consistent with the prior quarter. Pueblo Viejo production improved 23% sequentially due to continuing plant optimization, while North Mara had a stronger quarter due to higher grades. Production from Turquoise Ridge improved from the second quarter, with stronger underground mining performance more than compensating for the Sage autoclave's planned shutdown in the third quarter.
Preliminary third-quarter copper output was higher than the prior quarter, owing mostly to increased grades and recoveries at Lumwana following improved ore access caused by a ramp-up in stripping efforts in the second quarter.
Barrick Stock’s Price Performance and Valuation
GOLD’s stock is up 4.5% year to date, underperforming the the Zacks Mining – Gold industry’s 29.7% increase and the S&P 500’s rise of 20.5%. It has underperformed its peers, Newmont Corporation (NEM - Free Report) , Kinross Gold Corporation (KGC - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) , which have racked up gains of 10.4%, 64.6% and 56.6%, respectively.
GOLD’s YTD Stock Price Performance
From a valuation standpoint, GOLD is currently trading at a forward 12-month earnings multiple of 10.47X, lower than its five-year median. This represents a roughly 22.9% discount when stacked up with the industry average of 13.59X.
Image Source: Zacks Investment Research
Investment Thesis for GOLD Stock
Barrick is well-positioned to benefit from the progress in key growth projects that should significantly contribute to its production. Its major gold and copper growth projects are advancing per schedule and within budget, which underpins the next generation of profitable production. The restart of the Porgera mine would offer further upside, supporting the company’s planned production ramp-up through 2024.
Barrick has a robust liquidity position and generates healthy cash flows, which position it well to take advantage of attractive development, exploration and acquisition opportunities, as well as drive shareholder value and reduce debt. Surging gold prices should translate into strong profit margins and free cash flow generation.
Final Thoughts: Buy GOLD Shares
With a strong pipeline of growth projects, solid financial health, healthy growth trajectory and favorable gold market conditions, GOLD stock presents a compelling investment case ahead of its earnings announcement for those seeking exposure to the gold mining space. Backed by a positive earnings outlook, GOLD is a prudent choice to bet on for those looking to capitalize on the gold rush.