U.S. Markets closed

Surging Earnings Estimates Signal Upside for Barrick Gold (GOLD) Stock

Zacks Equity Research

Barrick Gold (GOLD) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.

The upward trend in estimate revisions for this gold and copper mining company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Barrick Gold, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $0.09 per share, which is a change of +28.57% from the year-ago reported number.

The Zacks Consensus Estimate for Barrick Gold has increased 29.63% over the last 30 days, as two estimates have gone higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $0.41 per share represents a change of +17.14% from the year-ago number.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for Barrick Gold. Over the past month, three estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 7.26%.

Favorable Zacks Rank

The promising estimate revisions have helped Barrick Gold earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for Barrick Gold have attracted decent investments and pushed the stock 12.1% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.


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
 
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research