Have you paid attention to shares of Barrick gold (GOLD – Free report) ? Shares are on the move, with the stock up 3.4% in the past month. The stock hit a new 52-week high of $21.21 in the previous session. Barrick Gold has gained 16.1% since the beginning of the year, compared to the 3.4% gain for the Zacks Basic Materials sector and the 32.3% return for the Zacks Mining – Gold industry.
What drives the outperformance?
The stock has an impressive track record of positive earnings surprises, having not missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 12, 2024, Barrick Gold reported earnings per share of $0.32 versus the consensus estimate of $0.26, while beating the consensus revenue estimate by 4.85%.
For the current fiscal year, Barrick Gold is expected to post earnings of $1.27 per share on revenue of $13.24 billion. This represents a 51.19% change in earnings per share versus a 16.13% change in revenue. For the next fiscal year, the company is expected to earn $1.70 per share on revenue of $14.86 billion. This represents a year-over-year change of 33.86% and 12.25% respectively.
Rating metrics
Barrick Gold may be at a 52-week high right now, but what could the future hold for the stock? An important aspect of this question is looking at valuation metrics to determine whether the company has gotten ahead of itself.
On this front, we can look at the Zacks Style Scores, as they give investors an additional way to sort through stocks (in addition to looking at a security’s Zacks Rank). These styles are represented by grades from A to F in the Value, Growth and Momentum categories, while there is also a combined VGM score. Investors should consider the style scores as a valuable tool that can help you choose the most appropriate Zacks Rank stocks based on their individual investing style.
Barrick Gold has a Value Score of B. The stock’s Growth and Momentum Scores are D and A, respectively, giving the company a VGM Score of B.
In terms of value distribution, the stock is currently trading at 16.6x EPS for the current fiscal year, which is a premium to its peer average of 16.4x. On a rolling cash flow basis, the stock currently trades at 10.5x, compared to its peer group average of 10.5x. Furthermore, the stock has a PEG ratio of 0.5. This isn’t enough to put the company at the top of all the stocks we cover from a value perspective.
Zacks Rank
We should also consider the stock’s Zacks Rank, as it bucks any trend in Style Scores. Fortunately, Barrick Gold currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimates from reporting analysts.
Since we recommend that investors select stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it appears that Barrick Gold passes the test. So it looks like Barrick Gold stock is still poised for more gains.
How does GOLD compare to the competition?
Shares of GOLD have soared and the company still appears to be a good bet, but what about the rest of the sector? A sector colleague that looks good, that is Iamgold Corporation (IAG – Free report) . IAG has a Zacks Rank of #1 (Strong Buy) and a Value Score of B, a Growth Score of C, and a Momentum Score of A.
Earnings were strong last quarter. Iamgold Corporation beat our consensus estimate by 100%, and for the current fiscal year, IAG is expected to post earnings of $0.48 per share on revenue of $1.55 billion.
Shares of Iamgold Corporation are up 10% over the past month and currently trade at a forward price-to-earnings ratio of 11.42x and a forward price-to-earnings ratio of 9.97x.
The mining gold industry is in the top 27% of all industries we have in our universe, so it looks like there are some nice tailwinds for GOLD and IAG even outside of their own solid fundamentals.