U.S. markets open in 6 hours 30 minutes

What Makes Barrick Gold (GOLD) a Solid Choice Right Now

Zacks Equity Research

Barrick Gold Corporation’s GOLD stock looks promising at the moment. The company’s shares have popped roughly 29% year to date.

We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.

The company has a Zacks Rank #2 (Buy) and VGM Score of B. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities for investors.

Let's see what makes this gold mining giant a compelling investment option at the moment.

An Outperformer

Barrick has outperformed the industry it belongs to over a year. The company’s shares have rallied 81.3% compared with 65.8% rise recorded by the industry. The company has also outpaced the S&P 500’s 9.1% rise over the same period.



 

 

Estimates Northbound

Earnings estimate revisions have the greatest impact on stock prices. Over the past two months, the Zacks Consensus Estimate for Barrick for 2020 has increased 10.5%.

Solid Growth Prospects

Growth prospects for Barrick look encouraging. The consensus mark for 2020 earnings is currently pegged at 84 cents per share, which suggests year-over-year growth of 64.7%. The same for second-quarter 2020 stands at 18 cents, indicating year-over-year growth of 100%.

Growth Drivers in Place

Barrick remains focused on its major exploration programs. The company’s growth projects across Turquoise Ridge, Goldrush and Cortez Deep South in Nevada are currently in execution. Construction of the third shaft at Turquoise Ridge is advancing according to schedule and is expected to deliver additional value. The Deep South project is also expected to contribute to Cortez’s production.  

In March 2020, Barrick also announced that the proposed expansion of the Pueblo Viejo gold mine will boost the mine life and also contribute to the economy of Dominican Republic till 2040 and beyond. The project will require an initial investment of $1.3 billion for expansion of the process plant and the tailings facility. The investment will extend the mine’s life and unlock potential to increase exports by $22 billion. The Pueblo Viejo expansion will also enable the mine to exploit the lower grades in the ore body.

Barrick should also benefit from its actions to reduce debt. The company cut its total debt by 3.2% year over year to $5.5 billion at the end of 2019. Its total debt further declined to $5.2 billion at the end of the first quarter. Also, the company has a strong liquidity position and generates healthy cash flows, which positions it well to benefit from development, exploration and acquisition opportunities.

Moreover, gold has been a bright spot this year as fears over the coronavirus pandemic made it the most attractive safe-haven asset. Prices of the yellow metal recently surged past the $1,750 an ounce level, triggered by the U.S.-China rift over Hong Kong, the civil unrest in the Unites States, a plunge in the U.S. dollar and coronavirus-induced global slowdown. Worries over coronavirus’ impact on the global economy and political uncertainties are likely to keep supporting the bullion moving ahead.

Meanwhile, Barrick’s average realized price of gold climbed around 22% year over year in first-quarter 2020 and boosted its margins. Higher gold prices are also expected to continue driving its earnings in the second quarter.
 

Barrick Gold Corporation Price and Consensus

 

Barrick Gold Corporation Price and Consensus

Barrick Gold Corporation price-consensus-chart | Barrick Gold Corporation Quote

 

Other Stocks to Consider

Other top-ranked stocks worth considering in the mining space are Agnico Eagle Mines Limited AEM, Newmont Corporation NEM and Equinox Gold Corp. EQX.

Agnico Eagle has a projected earnings growth rate of 75.3% for the current year. The company’s shares have rallied roughly 37% in a year. It currently carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Newmont has an expected earnings growth rate of 81.8% for the current year. The company’s shares have gained roughly 70% in the past year. It currently carries a Zacks Rank #2.

Equinox Gold has a projected earnings growth rate of 65.5% for the current year. The company’s shares have surged around 58% in a year. It currently has a Zacks Rank #2.

Zacks Top 10 Stocks for 2020

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?

Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2020 today >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Newmont Corporation (NEM) : Free Stock Analysis Report
 
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
 
Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
 
Equinox Gold Corp. (EQX) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research