Deutsche Bank Questioned Barrick’s Ability To Deleverage Its Balance Sheet
In a research report released Monday, Deutsche Bank analyst Jorge Beristain downgraded shares of Barrick Gold Corp. (NYSE:ABX) to Hold from Buy and reduced his price target to $16 (from $22), following the company third-quarter earnings release.
Beristain said, “Despite an operationally solid 3Q14, we (again) are increasingly concerned on Barrick’s ability to deleverage its balance sheet given headwinds facing the gold price, dimming prospects for its copper business and lack of strategic action on partnerships. We have removed from our model contributions for Pascua-Lama, a key gold growth project which we had anticipated would attract a strategic partner to help shoulder remaining capex toward a projected 1Q18E production start-up. Recent news of proposed higher royalties in Zambia will stretch its Lumwana copper mine and could result in further write-downs.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jorge Beristain has a total average return of -5.9% and a 39.5% success rate. Beristain has a -16.0% average return when recommending ABX, and is ranked #3163 out of 3355 analysts.