Goldman Sachs analyst Andrew Quail came out today with a favorable report on shares of Barrick Gold Corporation (USA) (NYSE:ABX), raising the price target to $27.00 (from $23.00), with a Conviction Buy rating. The analyst now expects ABX to generate over $1 billion in FCF over the next 12 months.
Quail explained, “The UK’s vote to leave the EU caused a flight to safety and lowered US 10-year treasury yields to 1.57% from 1.74%, driving gold prices up c.5% on 6/24. Our economics team still thinks the FOMC will raise rates in 2016 but probably not before December. Meanwhile, our commodities team believes the ultimate trajectory of gold will depend on the intensity and duration of the uncertainty shock created by the leave outcome and any potential revisions to the US growth outlook.”
“Given our more constructive view on gold prices we add ABX to the Conviction List. It is the largest gold company globally by both market capitalization and production. We believe it is well positioned to outperform as gold price fundamentals stabilize and the self-help idiosyncratic story continues to gain momentum,” the analyst concluded.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Andrew Quail has a yearly average return of -9.7% and a 36% success rate. Quail has a -13.7% average return when recommending ABX, and is ranked #3472 out of 3980 analysts.
Out of the 8 analysts polled by TipRanks (in the past 3 months), 3 rate ABX a Buy, 4 rate the stock a Hold and 1 recommends to Sell. With a downside potential of nearly 4%, the stock’s consensus target price stands at $19.94.