Barrick Gold Corporation (TSE:ABX) just released its third-quarter report and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$3.5b, some 2.8% above estimates, and statutory earnings per share (EPS) coming in at US$0.50, 48% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Barrick Gold after the latest results.
Taking into account the latest results, the most recent consensus for Barrick Gold from twelve analysts is for revenues of US$13.6b in 2021 which, if met, would be a meaningful 12% increase on its sales over the past 12 months. Statutory earnings per share are expected to sink 11% to US$1.52 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$13.1b and earnings per share (EPS) of US$1.49 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Despite these upgrades,the analysts have not made any major changes to their price target of US$31.38, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Barrick Gold at US$47.61 per share, while the most bearish prices it at US$20.61. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Barrick Gold's growth to accelerate, with the forecast 12% growth ranking favourably alongside historical growth of 3.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Barrick Gold is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Barrick Gold following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Barrick Gold going out to 2024, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Barrick Gold (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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