NEW YORK (AP) -- A Sterne Agee analyst initiated coverage of Barrick Gold Corp. with a "Neutral" rating, saying the giant mining company is positioned to increase its production and profitability.
THE OPINION: Analyst Michael S. Dudas said Wednesday that he expects Barrick's stock to benefit from its vast portfolio and from rising gold prices.
In a research note to clients, Dudas said the Toronto company's operations around the world and several projects in various stages of development could increase production in both the near term and the long term. He noted a majority owned project in the Dominican Republic and a second one in Chile and Argentina.
The analyst thinks that the price of gold will average $1,750 an ounce in the next 12 months to 18 months and could climb higher. That would benefit Barrick, which eliminated hedges in 2009.
However Barrick could face political and environmental challenges in some regions and higher-than-expected cost pressures, among other risks, Dudas said.
He also noted that a strong U.S. dollar can pressure prices for both gold and copper, which would affect Barrick's revenue, earnings and cash flow.
THE STOCK: Shares of Barrick rose 12 cents to $39.05 in morning trading.
