Here's How to Play Barrick Gold Stock Before Q4 Earnings Release

Core Viewpoint - Barrick Gold Corporation is expected to report strong fourth-quarter 2024 results driven by higher gold prices and robust production levels [1] Earnings Expectations - The Zacks Consensus Estimate for fourth-quarter earnings has been revised downward by 8.9% in the past 30 days, with an expected earnings of 41 cents per share, indicating a year-over-year increase of 51.9% [2] - Barrick has beaten the Zacks Consensus Estimate for earnings in three of the last four quarters, with an average earnings surprise of approximately 16.1% [3] Production and Cost Factors - Higher gold prices, which increased by roughly 27% last year due to strong demand from central banks and global uncertainties, are likely to support Barrick's performance [5] - Strong production is anticipated from the Pueblo Viejo plant expansion, improved output from Nevada Gold Mines, and high-grade performance from the Kibali mine [6] - However, increased production costs are expected to impact performance, with cash costs per ounce of gold rising around 21% year-over-year in Q3 2024 [7] Stock Performance and Valuation - Barrick's shares have gained 15.7% over the past year, underperforming the Zacks Mining – Gold industry's 48.4% increase and the S&P 500's rise of 20.9% [8] - The stock is currently trading at a forward 12-month earnings multiple of 11.14X, which is about 21.5% lower than the industry average of 14.20X [12] Investment Thesis - Barrick is positioned to benefit from key growth projects that are on schedule and within budget, contributing to future production [14] - The company has a strong liquidity position and generates healthy cash flows, allowing it to pursue development and acquisition opportunities [14] - Despite the positive outlook, high production costs may impact margins, necessitating caution [15]