Gold has shined brightly this year, fueled by its reputation as an inflation hedge and a refuge amidst geopolitical turmoil. More recently supported by heightened expectations of rate cuts, gold futures (GCZ24) surged above the $2,500 level late last week, while cash gold (GCY00) is up 17% on a YTD basis, outpacing the S&P 500 Index’s ($SPX) 9.8% return.
Longer term, analysts at major brokerage firms - including Citi and BofA - project that gold could soar to $3,000 in the long term, thanks to its enduring appeal as a currency hedge and a safe haven amid macroeconomic volatility.
That being said, Barrick Gold Corporation (GOLD), a leading player in the gold mining industry, has pulled back more than 10% from its July peak of $19.45, and is down 3.8% on a YTD basis. With this dividend-paying stock lagging behind gold’s performance and the broader market this year, investors seeking both growth potential and reliable income may want to scoop up this leading miner for catch-up gains.
About Barrick Gold Stock
Valued at around $30.5 billion by market cap, Canada-based Barrick Gold Corporation (GOLD) shines as a top-tier player in the global mining sector, excelling in the exploration, development, and production of gold and copper (HGU24). With a footprint in Canada and around the world, Barrick Gold stands out for its impressive portfolio of high-margin, long-life assets located in the planet’s richest gold and copper districts.
Beyond gold and copper, the company also explores and markets silver (SIU24) and energy materials, solidifying its position as a leading force in the mining industry.
Shares of this mining giant have climbed 6.7% over the past 52 weeks, but are in the red for 2024, lagging behind the SPX and the precious metal’s gains. Narrowing the focus, Barrick Gold is also trailing behind the iShares Global Gold Miners ETF’s (RING) 28.8% return over the past 52 weeks and 19.7% gain on a YTD basis.
On June 17, Barrick Gold shareholders received a quarterly dividend of $0.10 per share. Its annualized dividend of $0.40 per share translates to a 2.3% dividend yield. CFO Graham Shuttleworth pointed out that the company’s solid balance sheet and global asset base enable it to continue paying a substantial dividend to shareholders, while also ensuring enough liquidity to invest in business growth.
Apart from its reliable dividend yield, GOLD appears to be attractively valued compared to its historical norms. Priced at 15.78 times forward earnings and 2.81 times sales, GOLD stock is trading well below its own five-year averages of 21.40x and 3.43x, respectively.
Barrick Gold Reports Preliminary Q2 Production Results
Shares of Barrick Gold soared 4.9% on July 16 after the company revealed its preliminary Q2 production results, with gold production soaring to 948,000 ounces. Gains from Turquoise Ridge, Porgera, Tongon, North Mara, and Kibali propelled production above Q1 levels, despite planned production cuts at Cortez and Phoenix.
Management believes the company is on track to meet its full-year gold targets, with production expected to ramp up throughout the fiscal year. The company is slated to announce its Q2 earnings results before the market opens on Monday, Aug.12. Previously, on May 1, the company reported its Q1 earnings results, which blew past Wall Street’s top and bottom-line estimates.
Barrick Gold's revenue hit $2.8 billion, up 3.9% year over year, while adjusted EPS rose 35.7% annually to $0.19, crushing forecasts by a solid 18.8% margin. Plus, the company’s gold production reached 940,000 ounces for the quarter.
Looking forward to fiscal 2024, the company projects total gold production to range between 3.9 million ounces and 4.3 million ounces. Additionally, capital expenditures for the entire year are anticipated to land between $2.5 billion and $2.9 billion.
Analysts tracking Barrick Gold project the company’s profit to reach $1.16 per share in fiscal 2024, up 38.1% year over year, and grow another 31.9% to $1.53 in fiscal 2025.
What Do Analysts Expect for Barrick Gold Stock?
Analysts appear highly bullish on the stock’s prospects. GOLD stock has a consensus “Strong Buy” rating overall. Out of the 17 analysts covering the stock, 11 suggest a “Strong Buy,” two recommend a “Moderate Buy,” and the remaining four give a “Hold” rating.
The average analyst price target of $22.16 indicates a potential upside of roughly 27.4% from the current price levels. However, the Street-high target of $27.86 suggests that GOLD stock could rally as much as 60.2% from here.
On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
