On Wednesday, RBC Capital maintained its Outperform rating on Barrick Gold Corp. (NYSE: NYSE:GOLD), with a steady price target of $20.00. The firm's stance comes despite acknowledging some challenges in the company's recent performance.
"Our view: Slightly negative. 4Q operating results were previously released and 4Q financials are slightly weaker. We expect 2024 guidance will be the overwhelming focus within the release, where costs are higher yoy and production is slightly lower," said RBC analysts.
RBC Capital noted that while the guidance might be perceived negatively compared to formal consensus figures, the impact could be mitigated by Barrick Gold's previous disclosure of higher costs in the last quarter. The market's attention is anticipated to concentrate heavily on the company's 2024 guidance, especially considering the forecasted higher costs and slightly reduced production.
Barrick Gold also announced a new share buyback program. However, RBC Capital views this development as having limited significance due to the absence of buyback activity under the plan in 2023. Additionally, the firm projects low free cash flow for Barrick Gold in the near term, which could influence the materiality of the buyback initiative.
The analyst's remarks come in the wake of Barrick Gold's fourth-quarter operational results, which had already been released, providing investors with a glimpse into the company's recent performance. The focus now shifts to how the company's guidance for the coming year will play out in the face of the disclosed financial headwinds.
InvestingPro Insights
As investors digest the latest guidance from Barrick Gold Corp. (NYSE: GOLD), insights from InvestingPro suggest a nuanced picture. With a market capitalization of $24.83 billion USD, the company's valuation metrics present a mixed outlook. The P/E ratio, standing at an adjusted 188.35 for the last twelve months as of Q3 2023, indicates a high earnings multiple which may signal investor optimism about future growth despite recent performance concerns.
Analysts have revised their earnings expectations downwards for the upcoming period, reflecting the challenges highlighted by RBC Capital. However, an InvestingPro Tip suggests that Barrick Gold's stock is currently in oversold territory according to the RSI, which could imply potential for a rebound. Moreover, the company has demonstrated resilience by maintaining dividend payments for 37 consecutive years, with a current dividend yield of 2.83% as of the last recorded date, highlighting a commitment to returning value to shareholders.
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