Last Friday Barrick Gold Corp. (TSX: ABX) had its investor day with sell-side analysts and investors. Canaccord Genuity has since provided their takeaways, saying the bottom line is that the 5-year plan aligns with their estimates but with a higher CAPEX spend. As a result, Canaccord lowered their 12-month price target on the stock to C$28 and reiterated their buy rating.
Barrick Gold currently has 24 analysts covering the stock with an average 12-month price target of US$20.36, or an upside of 33%. Out of the 24 analysts, five have strong buy ratings, 13 have buy ratings, and the last six have hold ratings on the stock. The street high is US$25.
During investor day, Barrick Gold said they are continuing their plans to increase gold production modestly to 4.5 million ounces of gold, up 300,000 from this year. Then they expect to reach 4.7 million ounces of gold production by the end of 2027. Barrick said this increase in production would come from Cortez, Turquoise Ridge, the completion of the Pueblo Viejo expansion, and the restart of Porgera. Additionally, Barrick is guiding copper production to increase from 480 million pounds in 2023 to over 500 million pounds by 2025.
Barrick Gold expects gold cash costs to decrease over the next five years due to higher volumes and a lower gold price going forward. Barrick assumes the long-term oil price will be $70 a barrel, down from $90.
Canaccord says that the largest variance between the 5-year plan Barrick provided on Friday, and their long-term estimates are the capital expenditures. Barrick told investors that their CAPEX spending would increase versus Canaccord’s expected decrease. Barrick said CAPEX would increase to $2.6 billion versus Canaccords’ $2.0 billion estimate.
Most of the increase comes from Pueblo Viejo, a 60% owned joint venture with Newmont, and it is expected to cost $2.1 billion versus the $1.4 billion previously expected. While solar investment continues to be a large investment by Barrick, they estimate that all solar projects will cost roughly $400 million.
Information for this briefing was found via Edgar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
