Barrick Gold (GOLD) Up 8% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Barrick Gold (GOLD). Shares have added about 8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Barrick Gold due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Barrick’s Q4 Earnings Surpass Estimates, Sales Miss

Barrick recorded net earnings (on a reported basis) of $479 million or 27 cents per share in fourth-quarter 2023. The figure improved from a loss of $735 million or 42 cents per share in the year-ago quarter.

Barring one-time items, adjusted earnings per share were 27 cents. The figure beat the Zacks Consensus Estimate of 21 cents.

Barrick recorded total sales of $3,059 million, up 10% year over year. The figure missed the Zacks Consensus Estimate of $3,131.7 million.

Operational Highlights

Total gold production was 1,054,000 ounces in the reported quarter, down around 6% year over year. Our estimate for the same was 1,195,000 ounces. The average realized price of gold was $1,986 per ounce in the quarter, up around 15% year over year. This compares to our estimate of $1,969.

The cost of sales increased around 2.6% year over year to $1,359 per ounce. AISC moved up around 10% year over year to $1,364 per ounce in the quarter.

Copper production increased nearly 18% year over year to 113 million pounds. Our estimate for the quarter was pegged at 134 million pounds. The average realized copper price was $3.78 per pound, down 1% year over year.

Financial Position

At the end of the quarter, Barrick had cash and cash equivalents of $4,148 million, down 6.6% year over year. The company’s total debt was $4,726 million at the end of the quarter, down 1% year over year.

The operating cash flow was $997 million in the quarter, whereas free cash flow was $136 million.

FY23 Results

In 2023, Barrick reported total sales of $11,397 million, up 3% from the previous year’s levels. Earnings surged 200% to $0.72 per share, while adjusted net earnings were up 12%, reaching 84 cents per share. Operating cash flows rose 7% year over year to nearly $3.7 billion. Free cash flow surged 50% and totaled $646 million.

Guidance

For 2024, Barrick anticipates attributable gold production to be in the range of 3.9-4.3 million ounces.

AISC is projected to be $1,320-$1,420 per ounce. Cash costs per ounce are forecast to be $940-$1,020. The company also expects to see a cost of sales of $1,320-$1,420 per ounce.

Barrick expects a copper production of 180-210 thousand tons at AISC of $3.10-$3.40 per pound, cash costs per ounce of $2-$2.30 and cost of sales of $2.65-$2.95 per pound.

Capital expenditures are projected in the range of $2,500-$2,900 million for 2024.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -15.94% due to these changes.

VGM Scores

At this time, Barrick Gold has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Barrick Gold has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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