Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 17 Jan, 25 | ABX | Buy | CAD 23.14 | CAD 25.685 | CAD 27.227 | 19 days | 17.7% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Barrick Gold Corporation engages in the exploration, mine development, production, and sale of gold and copper properties in Canada and internationally. The company also explores and sells silver and energy materials. It has ownership interests in producing gold mines located in Argentina, Canada, Côte d'Ivoire, the Democratic Republic of Congo, the Dominican Republic, Mali, Tanzania, and the United States. The company also has ownership interests in producing copper mines located in Chile, Saudi Arabia, and Zambia; and various other projects located in the Americas, Asia, and Africa. Barrick Gold Corporation was founded in 1983 and is based in Toronto, Canada.
Higher Revenue
(USD 3,368 mn in Q3 2024 vs USD 2,862 mn in Q3 2023)
Higher Net Income
(USD 780 mn in Q3 2024 vs USD 585 mn in Q3 2023)
Lower Gold Production
(943 (000 oz) in Q3 2024 vs 1,039 (000 oz) in Q3 2023)
Higher Taxes
(USD 479 mn in Q3 2024 vs USD 303 mn in Q4 2023)
Volatility in the commodity price, inflationary pressures, forex headwinds, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 23.14 | 19.65 | 25.685 | 27.227 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
1. Production and Sales Results- Barrick Gold Corporation has announced preliminary production and sales results for the Q3 FY24. The company produced 943 thousand ounces of gold and 48 thousand tonnes of copper in Q3, with sales of 967 thousand ounces of gold and 42 thousand tonnes of copper. Barrick continues to expect a stronger performance in Q4 and anticipates meeting its full-year production guidance for both gold and copper.
2. Gold Production and Sales Performance- In Q3 FY24, Barrick’s gold production was consistent with the previous quarter, with notable contributions from several key operations. Pueblo Viejo achieved a 23% sequential improvement, driven by ongoing plant optimization efforts. North Mara also performed well, benefiting from higher grades. At Carlin, the completion of the Gold Quarry roaster expansion during a Q3 shutdown is expected to lead to higher throughput and improved recoveries in Q4. The company anticipates further gains at Turquoise Ridge due to stronger underground mining performance, despite a planned shutdown of the Sage autoclave in Q3. Additionally, Kibali saw progress with underground development, unlocking more high-grade headings, which, combined with higher open-pit grades, is expected to result in a stronger Q4 performance.
3. Gold and Copper Production by Operation- Barrick’s operations produced a total of 943 thousand ounces of gold in Q3 FY24. The Nevada Gold Mines joint venture contributed the largest share with 385 thousand ounces, followed by Loulo-Gounkoto with 144 thousand ounces and Pueblo Viejo with 98 thousand ounces. Copper production totaled 48 thousand tonnes, with Lumwana, Zaldívar, and Jabal Sayid being the primary contributors. In the year-to-date period, Barrick has produced 2,831 thousand ounces of gold and 131 thousand tonnes of copper, with total sales of 2,833 thousand ounces of gold and 123 thousand tonnes of copper.
4. Outlook for Q4 2024- Barrick’s outlook for Q4 2024 remains positive, with the company expecting a stronger performance in both gold and copper production, which should support its full-year guidance. The company plans to provide more detailed commentary and analysis on its Q3 results when it reports its official quarterly results on November 7, 2024. With ongoing operational improvements, including higher grades and recovery rates, Barrick is well-positioned to finish the year strongly and continue its successful growth trajectory in the coming quarters.
Considering the expected valuation upside, higher production, higher production, healthy guidance, improving cash flow profile, decent dividend yield, current trading levels and key business risks a ‘Buy’ recommendation has been given on the stock at the last closing price of CAD 23.14, as on January 17, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Basic Materials Industry: Gold
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| ABX Barrick Gold Corp |
-0.48 1.73% | 27.30 | 17.48 | 9.47 | 3.29 | 1.18 | 2.31 | 4.80 |
| NGT Newmont Goldcorp Corp |
-1.72 2.46% | 68.09 | - | 7.79 | 4.20 | 1.73 | 3.37 | 24.37 |
| AEM Agnico Eagle Mines Limited |
-1.18 0.77% | 152.81 | 39.71 | 16.75 | 6.98 | 2.06 | 5.48 | 12.87 |
| WPM Wheaton Precious Metals Corp |
-0.58 0.52% | 110.64 | 48.51 | 33.33 | 33.62 | 4.07 | 23.68 | 30.92 |
| FNV Franco-Nevada Corporation |
-1.2 0.53% | 223.69 | - | 29.33 | 30.17 | 3.95 | 20.38 | 27.50 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 17, 2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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