Berenberg Weighs In On Barrick Gold Corporation (USA) (ABX) In Light of Merger Talks


Berenberg analyst Yuriy Vlasov remains bearish on Barrick Gold Corporation (USA) (NYSE:ABX) amid the prospective merger talks between Acacia Mining and Endeavour Mining, which he points out are just beginning and may not come to fruition.

Bloomberg had noted the deal might come in the form of a reverse takeover, where LSE-listed Acacia would buy TSX-listed Endeavour Mining with the intent of keeping the London listing for the expanded company.

As the analyst sees the deal, “For Barrick Gold, which holds 64% of Acacia Mining, the potential merger would mark another step towards the divestment of its holding in Acacia Mining, in our view.”

“Barrick Gold is one step closer to reducing/divesting its stake in Acacia Mining: Barrick Gold, the leading shareholder of Acacia Mining with 64%, is likely to benefit from a potential merger deal, in our view. If the deal goes ahead, the conditions will be more favourable for Barrick to divest part or all of its stake in Acacia Mining. Divestment of the Acacia stake would be beneficial for Barrick for two reasons: 1) the company could use the proceeds to reduce its debt; and 2) its asset base would be simplified,” Vlasov contends.

However, until the deal becomes finalized, the analyst reiterates a Sell rating on ABX with a price target of $15.20, which represents a 12% downside from where the shares last closed.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, one-star analyst Yuriy Vlasov is ranked #3,141 out of 4,349 analysts. Vlasov has a 25% success rate and loses 2.9% in his annual returns. However, when recommending ABX, Vlasov earns 10.6% in average profits on the stock.

TipRanks analytics exhibit ABX as a Buy. Based on 6 analysts polled by TipRanks in the last 3 months, 2 rate a Buy on ABX stock while 4 maintain a Hold. The 12-month average price target stands at $20.80, marking a nearly 20% upside from where the stock is currently trading.