Deutsche Bank upgraded Barrick Gold
Barron’s reported that Deutsche Bank (DB) analyst Chris Terry has increased gold’s (GLD) (IAU) target price to $1,350 per ounce for 2019. Due to increased precious metal price forecasts, Terry also upgraded Barrick Gold (GOLD) from a “hold” to a “buy.” He also attributed the upgrade to cost-cutting opportunities, money-saving through synergies, and divesting assets.
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Barrick’s YTD performance
Barrick Gold has risen 0.3% YTD (year-to-date) until April 11. Barrick Gold has underperformed its senior and intermediate peers (NUGT) (GDXJ) and the broader benchmark index (GDX). While Barrick Gold stock rose 0.3% until April 11, GDX returned 5.5%.
While Barrick’s fourth-quarter earnings beat the expectations, its top line fell short of the market expectations. The initial euphoria surrounding Barrick Gold’s merger with Randgold Resources, which was completed on January 1, seems to be over. Analysts and investors are waiting for the actual benefits and the execution plan before they turn more positive on the stock
Barrick’s joint venture with Newmont Mining
On February 25, Barrick Gold put in an unsolicited bid to acquire Newmont Mining (NEM), which didn’t offer any premium to its stock price. On March 4, Newmont Mining rejected the bid saying that Barrick Gold’s unsolicited negative premium proposal isn’t in shareholders’ best interest. Newmont Mining thinks that the combination with Goldcorp (GG) is significantly more accretive to shareholders. On March 11, Barrick Gold ended the hostile bid and announced the joint venture with Newmont Mining in Nevada.