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Is Barrick Gold Stock a ‘Buy’ amid Economic Turmoil?


Jun. 26 2020, Updated 7:45 a.m. ET

  • Barrick Gold stock has risen 39.3% year-to-date. Gold prices have been strong amid the economic turmoil and stock market crash.
  • Analysts see more upside in gold prices. There doesn’t seem to be an end to the economic woes and the COVID-19 pandemic.
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Barrick Gold stock

Barrick Gold (NYSE:GOLD) is the world’s second-largest gold miner. The stock has risen 39.3% year-to-date. Gold miners’ stock prices have surged this year since gold prices have been strong. Usually, gold does well during an economic crisis because it’s a safe bet. Overall, 2020 looks good for gold and gold miners.

Bank of America

Bank of America put its weight behind gold. The bank expects the precious metal to move beyond $2,000 per ton. Previously, Goldman Sachs issued a bullish note on gold. If gold prices rise, it could lead to more upside in Barrick Gold’s stock price.

Gold can be a good hedge during uncertain times. While US stock markets have rallied from their March 23 lows, there are concerns about the rally’s sustainability. On Thursday, the IMF also warned about a disconnect between asset prices and the real economy. Investors have largely ignored such bearish calls. US stock markets have shown a lot of resilience. However, the stock market euphoria doesn’t resonate with the harsh economic realities.

Analysts’ target prices for Barrick Gold

Wall Street analysts are bullish on Barrick Gold stock. Three analysts recommend a “strong-buy,” eight recommend a “buy,” and six recommend a “hold.” The stock’s mean consensus target price of $29.86 represents a potential upside of 16% over its closing price on Thursday.

Currently, Barrick Gold is valued at a 2021 EV-to-EBITDA multiple of 7.8x, which doesn’t seem too unreasonable considering gold’s positive outlook. The company has been taking a lot of measures to derisk its balance sheet and reduce its debt. Barrick Gold has sold some non-core assets to raise cash. At the end of the first quarter of 2020, the company had a net debt of $1.8 billion—down from $4.1 billion at the end of 2018.


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