Barrick Gold Corp. (ABX, Financial) was The stock is 1% down at $10.48 in early morning trading on Thursday despite an upgrade by Citigroup (C).
Citigroup raised its rating on Barrick Gold Corp. to neutral from sell, suggesting more opportunities for options investors and other traders, who use certain trading strategies for neutral markets.
Citigroup’s upgrade is preceded by five downgrades and one upgrade. All of them have been released this year.
- Jefferies downgraded Barrick Gold from buy to hold on Aug. 6.
- RBC Capital downgraded it from outperform to sector perform on July 30.
- Morgan Stanley downgraded it from equal-weight to underweight on June 6.
- Canaccord Genuity downgraded it from buy to hold on April 23.
- RBC Capital upgraded it from sector perform to outperform on March 12.
- Argus downgraded it from buy to hold on March 2.
As of August, eight analysts out of 24 recommended buying Barrick Gold. Fifteen analysts suggested to hold the stock in the Canadian gold producer. One analyst believes Barrick will underperform. The recommendation rating is 3 out of 5. The range is 1 (strong buy) to 5 (sell).
Citigroup has raised its rating on Barrick Gold but lowered its price target by 8.3% from $12 to $11 per share. The new price target of Citigroup should drag the average down at $14.19 per share. The updated average will be a mean of 22 $11 to $18 per-share ranging estimates.
Barrick Gold is trading at compelling prices. Currently, it has a market capitalization of $12.234 billion that per-share is below the 200-, 100- and 50-day simple moving average lines. The share price has a 52-week range of $9.72 to $18.35. The stock is cheap after a 41% drop for the 52 weeks through Aug. 29. The price-book ratio is 1.33 versus an industry median of 1.74 and the EV-to-Ebitda ratio is 8.44 versus an industry median of 9.3.
The 14-day relative strength index is 39.11, within a range of 20 to 80. That means that the stock has yet to reach oversold levels.Â
The Canadian producer of gold has potential to appreciate more than 35% before August 2019, if the commodity will reverse its course and run up to between $1,250 and $1,300 per troy ounce.
Barrick Gold would have the right catalysts to benefit. On the production side the miner is already strongly positioned. Barrick Gold is, together with Newmont Mining Corp., (NEM) the world’s largest producer of gold.
For full fiscal 2018, the miner is projecting gold production of between 4.5 million and 5 million ounces. The company also produces and sells copper, of which it expects output of between 345 million and 410 million pounds.
Interesting news is expected from the cost side of the company. A further reduction of the financial burden, the introduction of new technologies at mining and important strategic agreements of partnership with other miners that are specialized in untapping underground mineral resources worldwide should not leave investors of Barrick Gold Corp in the cold.
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Disclosure: I have no positions in any security mentioned in this article.
