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Why Is Barrick Gold (GOLD) Up 11.2% Since Last Earnings Report?

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It has been about a month since the last earnings report for Barrick Gold (GOLD - Free Report) . Shares have added about 11.2% 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 Q2

Barrack recorded net earnings (on a reported basis) of $357 million or 20 cents per share in second-quarter 2020, up from $194 million or 11 cents in the year-ago quarter.

Barring one-time items, adjusted earnings per share increased 155.6% year over year to 23 cents. The figure also beat the Zacks Consensus Estimate of 19 cents.

Barrick recorded total sales of $3,055 million, up 48.1% year over year. The figure topped the Zacks Consensus Estimate of $2,656.5 million.

Operational Highlights

Total gold production amounted to around 1.15 million ounces in the second quarter, down 15.1% year over year from 1.35 million ounces. Average realized price of gold was $1,725 per ounce in the quarter, up 31% year over year.

Cost of sales moved up 12% year over year to $1,075 per ounce. All-in sustaining costs (AISC) rose 19% year over year to $1,031 per ounce in the quarter.

Copper production increased 24% year over year to 120 million pounds. Average realized copper price was $2.79 per pound, up 6% year over year.

Financial Position

At the end of the second quarter, Barrick had cash and cash equivalents of $3,743 million, up 74% year over year. The company’s total debt was $5,168 million at the end of the quarter, down 11% year over year.

Net cash provided by operating activities surged 137.6% year over year to $1,031 million.

Guidance

For 2020, Barrick continues to anticipate attributable gold production in the range of 4.6-5 million ounces. AISC is expected in the range of $920-$970 per ounce, unchanged from the prior view. Cost of sales is expected in the range of $980-$1,030 per ounce, unchanged from the previous guidance.

The company continues to expect copper production in the range of 440-500 million pounds at AISC of $2.20-$2.50 per pound and cost of sales of $2.10-$2.40 per pound.

Capital expenditures are projected between $1,600 million and $1,900 million.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 10.96% due to these changes.

VGM Scores

At this time, Barrick Gold has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

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

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Barrick Gold has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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