Gold has long been treated as a strategic asset class, one which would stay stable while investors’ other securities and equities were otherwise jumping around. Traditionally, many see it as a hedge against inflation, as was the case throughout FY20 when it surged mid-summer, as government spending hit record highs. However, even with fears of impending inflation, the asset saw its price point precipitously fall just last week, along with shares of the miner Barrick Gold Corporation (GOLD). (See Barrick Gold Corp. stock charts on TipRanks)
Michael Jalonen of Bank of America provided his hypothesis on the matter, along with a recap of Barrick’s earnings, which released last Monday. He wrote that the company reported earnings per share of $0.29, beating Wall Street consensus estimates of $0.27.
Jalonen reiterated a Buy rating on the stock, and provided a price target of $29. If met, this 12-month target will represent an upside of 46.17%.
Although Barrick’s share price is highly correlated to the price fluctuations of gold itself, the company does have its own positives to look into. Jalonen explained that although several production plants are experiencing either complete or semi-shutdowns, these will be temporary and should translate into more output by late-Q3.
Additionally, Barrick is still on pace to meet FY21 guidance targets for gold production, and is also raising targets for copper in the second half of the year. Its copper business is experiencing a boon from the Lumwana mine in Zambia.
Jalonen sees GOLD as undervalued in relation to its ilk, and from this he derives his bullish rating.
On TipRanks, GOLD has an analyst rating consensus of Strong Buy, based on 6 Buy ratings. The average Barrick Gold Corp. price target is $29.40, suggesting a possible 12-month upside of 48.19%. GOLD closed trading Tuesday at a price of $19.84 per share.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.