On Friday, Citi issued an update on Barrick Gold Corp. (NYSE: NYSE:GOLD), reducing the price target to $17.00 from the previous $23.00 while keeping a Neutral rating on the stock. The adjustment reflects the latest company guidance and revised commodity price forecasts from Citi's global commodity team. According to InvestingPro data, the stock has already taken a significant hit, down over 9% in the past week, with its RSI suggesting oversold territory.
Citi's analysts have updated their model for Barrick Gold to incorporate the company's most recent guidance and adjusted expectations for commodity prices. Despite a bullish outlook on gold, with projections of the price nearing $3,000 per ounce by the end of 2024, Citi has opted to maintain a Neutral stance on Barrick Gold.
The forecast for gold is based on several factors, including a weakening US labor market, persistently high interest rates that could hinder economic growth, and an anticipated increase in ETF demand. InvestingPro analysis indicates the stock is currently undervalued, with strong fundamentals including a healthy current ratio of 2.65 and an impressive 38-year track record of consistent dividend payments.
Barrick Gold's shares are believed to hold numerous potential sources of latent value. These include the full potential of Pueblo Viejo (PV), the Fourmile project, the Lumwana mine expansion, and the Reqo Diq project. Citi notes that updated studies for Lumwana and Reqo Diq are expected in early 2025.
Despite the acknowledged underlying value within Barrick Gold's portfolio, the firm's analysts have expressed caution. The reason for the Neutral rating is attributed to the complexity of the company's operations, with many variables needing to align favorably in the short term, which presents a degree of uncertainty for the stock's immediate outlook.
In other recent news, Barrick Gold Corporation has been in the spotlight due to a series of significant developments. The company reported strong financial results for Q3 2024, with a 33% increase in adjusted net earnings per share and a 24% boost in free cash flow, reaching $444 million. Gold production remained stable, while copper production saw a 12% increase. Barrick Gold also managed to reduce its net debt by 27% to $500 million due to reduced costs.
However, the company is facing a challenging situation in Mali with ongoing disputes concerning the Loulo-Gounkoto mining complex. Despite numerous attempts to negotiate a Memorandum of Agreement with the Government of Mali, the company has not been successful. The situation has escalated with the unwarranted detention of Barrick employees and blocked gold shipments.
In addition to the above, four of Barrick's employees at the Loulo-Gounkoto complex have been detained and are awaiting trial on charges that the company contests. Despite these legal challenges, Barrick is actively engaging with the Malian government to resolve the dispute.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.