Jefferies analyst David Hove reiterated a Buy rating on Barrick Gold (GOLD – Research Report) yesterday and set a price target of $26.00.
David Hove has given his Buy rating due to a combination of factors that highlight Barrick Gold’s strategic positioning and potential for growth. The company’s expansion into the copper market is expected to significantly reduce its overall costs, with “Real Costs” projected to fall to approximately $1,250 per ounce. This reduction is attributed to the anticipated free cash flow yield of around 20% at current market conditions, which enhances Barrick’s financial outlook.
Moreover, the enterprise value of Barrick’s copper business is estimated at approximately $14 billion, suggesting that the gold segment is undervalued compared to its major competitors. The stock currently trades at a price-to-net asset value ratio of 0.5x, which is lower than its peers. This valuation, combined with the growth potential from the copper business, supports the Buy recommendation. Additionally, Barrick’s performance-linked shareholder returns are expected to improve during the capital-intensive phase from 2025 to 2028, further justifying the positive outlook.
Hove covers the Basic Materials sector, focusing on stocks such as Newmont Mining, Barrick Gold, and Royal Gold. According to TipRanks, Hove has an average return of 15.9% and a 93.75% success rate on recommended stocks.
In another report released on March 19, Stifel Nicolaus also maintained a Buy rating on the stock with a C$34.00 price target.