How Much Could Barrick’s Stock Grow in 2018?

by Trefis Team
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Barrick Gold (NYSE: ABX) had a rough performance in 2017 with its stock declining by ~11%, largely as a resultant impact of the uncertainty in its Acacia mines and the consequent fall in output. This fall in share price was despite the fact that gold prices averaged 13% higher year-on-year (Y-o-Y) for full-year 2017. We assume that Barrick’s performance would be superior this year in comparison to 2017 and the same conclusion has been highlighted in our interactive valuation calculator for the company. Higher gold prices and stability in Acacia should be able to support the stock at higher levels in 2018.

In our analysis, we have assumed Barrick’s P/E to stand at ~19, close to its historic average (excluding outliers). Additionally, we assume the company to report a revenue of ~$ 8.42 billion for 2018 and its estimated adjusted earnings to stand at ~$1 billion. This results in a price estimate of $17.08 for the stock, ~27% higher than the current price level. Our interactive platform outlines our key assumptions for the stock and the resulting impact on the price for the upcoming year. These assumptions are modifiable (blue dots) which can be updated per your own estimates to provide a separate outlook on the company’s stock price.

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