It has been about a month since the last earnings report for Barrick Gold (GOLD). Shares have added about 3.2% 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 catalysts.
Barrick’s Earnings and Sales Surpass Estimates in Q4
Barrick recorded net earnings (on a reported basis) of $685 million or 39 cents per share in fourth-quarter 2020, down from $1,387 million or 78 cents per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share surged 105.9% year over year to 35 cents. The figure also beat the Zacks Consensus Estimate of 31 cents.
Barrick recorded total sales of $3,279 million, up 13.7% year over year. The figure topped the Zacks Consensus Estimate of $3,220.7 million.
Operational Highlights
Total gold production amounted to around 1.2 million ounces in the fourth quarter, down 16.2% year over year from 1.4 million ounces. Average realized price of gold was $1,871 per ounce in the quarter, up 26.2% year over year.
Cost of sales increased 1.8% year over year to $1,065 per ounce. AISC moved up around 1% year over year to $929 per ounce in the quarter.
Copper production increased 1.7% year over year to 119 million pounds. Average realized copper price was $3.39 per pound, up 22.8% year over year.
FY20 Results
Earnings (as reported) for full-year 2020 were $1.31 per share compared with earnings of $2.26 per share a year ago. Net sales rose 30% year over year to around $12,595 million.
Financial Position
At the end of the year, Barrick had cash and cash equivalents of $5,188 million, up 57% year over year. The company’s long-term debt was $5,135 million at the end of the quarter, down 0.5% year over year.
Net cash provided by operating activities surged 91.2% year over year to $5,417 million.
Guidance
For 2021, Barrick anticipates attributable gold production in the range of 4.4-4.7 million ounces. AISC is expected in the range of $970-$1,020 per ounce and cost of sales is expected in the range of $1,020-$1,070 per ounce.
The company expects copper production in the range of 410-460 million pounds at AISC of $2.00-$2.20 per pound and cost of sales of $1.90-$2.10 per pound.
Capital expenditures are projected between $1,800 million and $2,100 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -9.9% due to these changes.
VGM Scores
Currently, Barrick Gold has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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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