Should You Buy Barrick Gold Stock Ahead of Q1 Earnings?

Barrick Gold Corporation GOLD is slated to come up with first-quarter 2025 results before the opening bell on May 7. The company’s performance is expected to reflect higher gold prices amid cost headwinds.

The Zacks Consensus Estimate for first-quarter earnings has been revised 26.1% upward in the past 60 days. The consensus estimate for earnings is pegged at 29 cents per share, suggesting a 52.6% year-over-year rise.

Image Source: Zacks Investment Research

GOLD beat the Zacks Consensus Estimate for earnings in three of the last four quarters. In this timeframe, it delivered an earnings surprise of roughly 12%, on average.

Image Source: Zacks Investment Research

Q1 Earnings Whispers for GOLD Stock

Our proven model does not conclusively predict an earnings beat for GOLD this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

GOLD has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Factors Shaping GOLD’s Q1 Results

Higher gold prices are likely to have supported the company’s performance in the March quarter. Gold prices are shooting up this year as worries over the global trade war have boosted safe-haven demand for bullion. The price rally has been driven by a surge in safe-haven demand amid the intense trade tussle, global economic uncertainties and a weaker U.S. dollar. Prices of the yellow metal climbed nearly 19% in the first quarter and are already up roughly 23% this year.
 
Weaker production is expected to have impacted GOLD’s performance in the first quarter. The consensus estimate for production for the to-be-reported quarter stands at 710,000 ounces, reflecting a decline of around 34% sequentially and 24% from the year-ago quarter. 

The company, during its fourth-quarter call, provided a tepid forecast for 2025, with attributable gold production expected in the range of 3.15-3.5 million ounces, excluding production from Loulo-Gounkoto, which is temporarily suspended. While a potential restart of the mine would provide an upside, this projection suggests a year-over-year decline. Higher production from Pueblo Viejo, Turquoise Ridge, Porgera and Kibali, along with stable performance across Carlin and Cortez, is expected to be offset by reduced production across Veladero and Phoenix.
 
Higher year-over-year production costs are likely to have weighed on the company’s first-quarter results.  In the fourth quarter of 2024, cash costs per ounce of gold increased around 7% year over year, while AISC rose roughly 6%. For 2025, GOLD projects total cash costs per ounce of $1,050-$1,130 and AISC in the range of $1,460-$1,560 per ounce. These projections suggest a year-over-year increase at the midpoint of the respective ranges.  

Barrick Stock’s Price Performance and Valuation

GOLD’s shares have gained 11.6% over the past year, underperforming the Zacks Mining – Gold industry’s 47.2% increase while topping the S&P 500’s rise of 8.7%. Among its peers, Newmont Corporation NEM, Kinross Gold Corporation KGC and Agnico Eagle Mines Limited AEM have racked up gains of 26.6%, 115.6% and 73.1%, respectively, over the same period. 

GOLD’s One-year Stock Price Performance

Image Source: Zacks Investment Research

From a valuation standpoint, GOLD is currently trading at a forward 12-month earnings multiple of 10.76, lower than its five-year median. This represents a roughly 28.1% discount when stacked up with the industry average of 14.96X.

Image Source: Zacks Investment Research

Investment Thesis for GOLD Stock

Barrick is well-positioned to benefit from the progress in key growth projects that should significantly contribute to its production. Its major gold and copper growth projects are advancing per schedule and within budget, which underpins the next generation of profitable production. 

GOLD has a robust liquidity position and generates healthy cash flows, which positions it well to take advantage of attractive development, exploration and acquisition opportunities, as well as drive shareholder value and reduce debt. Surging gold prices should translate into strong profit margins and free cash flow generation.

GOLD is challenged by higher costs, which may eat into its margins. Increased mine-site sustaining capital spending, higher labor costs and potentially steeper energy costs may lead to higher costs.

Final Thoughts: Hold Onto GOLD Shares

GOLD is well-placed with a strong pipeline of growth projects, solid financial health, healthy growth trajectory and favorable gold market conditions. The strength in gold prices should also boost its profitability and drive cash flow generation. Despite these positives, its high production costs warrant caution. Holding onto the GOLD stock will be prudent for investors who already own it, awaiting more clarity on the company’s prospects following its forthcoming earnings release.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research