Gold's status as a safe haven is shining brighter, fueled by central bank buying, geopolitical tensions, and expectations for Fed rate cuts. December-dated gold futures (GCZ24) hit a record $2,570 an ounce on Aug. 20 before easing back, while spot gold has surged 30% over the past year.
Analysts from Citi and Bank of America predict gold could hit $3,000 in the long term, citing its enduring appeal as a hedge against economic volatility. More recently, Goldman Sachs issued a long gold recommendation, forecasting the yellow metal could reach $2,700 by early 2025 amid the “current softening cyclical environment.”
That should bode well for Canadian gold mining firm Barrick Gold Corporation (GOLD), one of the largest gold producers in the world. As the shares trade less than 10% below 52-week highs, here’s why GOLD stock still looks like a buy.
About Barrick Gold Stock
Founded in 1983, Barrick Gold Corporation (GOLD) has grown into one of the world’s gold mining giants, with operations spanning North and South America, Africa, and Australia. With a market cap of $34.1 billion, Barrick also explores and markets copper (HGZ24), silver (SIU24), and energy materials, making it a diversified powerhouse in the mining industry.
Shares of this mining giant have been on a solid upswing, climbing 20.5% over the past 52 weeks and rallying 21.5% in just the past six months. GOLD stock has pulled back about 8.8% from its 52-week high of $20.89, which it reached on Aug. 20.
On Aug. 12, Barrick Gold declared a quarterly dividend of $0.10 per share, payable on Sept. 16. Its annualized dividend of $0.40 per share translates to a 3.59% dividend yield.
Plus, with a 79.3% dividend payout ratio, the company demonstrates a strong commitment to rewarding shareholders, while still retaining enough earnings to fuel growth. Adding to the good news, the company repurchased 2.95 million shares in fiscal Q2 as part of its $1 billion buyback program launched in February.
Barrick’s CFO, Graham Shuttleworth, highlighted that the company's strong balance sheet and top-tier gold and copper asset base enabled them to deliver a solid dividend and maintain liquidity for growth, while also buying back stock at attractive prices.
GOLD Stock Climbs on Q2 Earnings Beat
Shares of Barrick Gold rose 9.1% after its Q2 earnings results on Aug. 12, with both the top and bottom lines surpassing estimates. It raked in $3.16 billion in revenue, a 12% annual increase, buoyed by an average realized gold price of $2,344/ounce, up from last year’s $1,972/ounce. Its adjusted EPS jumped 68% year over year to $0.32, beating the consensus estimate of $0.26.
Despite a 6% dip in gold production to 948,000 ounces, Barrick's cash flow from operations surged 39.3% to $1.16 billion. Free cash flow skyrocketed nearly fivefold to $340 million from $63 million last year. Debt stayed stable at $4.7 billion in Q2. Plus, Barrick's 61.5% stake in Nevada Gold Mines, the world’s largest gold project, and its consistent reserve replacement - 109% in 2023 - shows its strong position.
Looking ahead to fiscal 2024, the company is eyeing gold production between 3.9 million ounces and 4.3 million ounces, and capital spending is anticipated between $2.5 billion and $2.9 billion.
Analysts tracking Barrick Gold project the company’s profit to reach $1.22 per share in fiscal 2024, up 45.2% year over year, and grow another 29.5% to $1.58 in fiscal 2025.
What Do Analysts Expect for Barrick Gold Stock?
On Aug. 29, Argus upgraded Barrick Gold to “Buy” from “Hold” with a $24 price target. The brokerage firm’s analyst, John Eade, highlighted Barrick’s status as a top gold producer with a solid history and a clean balance sheet.
Amid global economic uncertainty, inflation, and ongoing conflicts in Ukraine and the Middle East, the analyst sees gold - already near the top of its five-year price range - remaining in high demand. Eade also praised Barrick’s long-term strategy, particularly its focus on replenishing gold reserves rather than purchasing them at inflated prices, a move that sets the company up for sustainable growth.
Eade raised GOLD’s fiscal 2024 adjusted EPS estimate to $1.25 from $1.05, signaling a nearly 50% boost, and boosted the 2025 EPS forecast to $1.60 from $1.30.
Analysts are highly bullish on the stock’s prospects, as GOLD has a consensus “Strong Buy” rating overall. Out of the 17 analysts covering the stock, 12 suggest a “Strong Buy,” two recommend a “Moderate Buy,” and the remaining three maintain a “Hold” rating.
The mean price target for GOLD of $22.50 implies a potential upside of about 18% from current levels. The Street-high estimate of $27.86 suggests the stock could rally as much as 46.2%.
On the date of publication, Sristi Suman Jayaswal 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.
