Barrick Gold (GOLD.US) higher in pre-market trading after better-than-expected results for the second quarter of 2024
Barrick Gold is up 2% in pre-market trading following the publication of better-than-expected results for the second quarter of fiscal year 2024. One of the world's largest gold producers reported an increase in profits due to higher gold and copper prices, despite lower production compared to the previous year.
Key financial data:
- Revenue: $3.16 billion
- Up 12% year-over-year from $2.82 billion in Q2 2023
- Above analyst expectations of $3.13 billion
- Adjusted earnings per share (EPS): $0.32
- Up 68% year-over-year from $0.19 in Q2 2023
- Above analyst expectations of $0.27
- Net income: $370 million
- Up from $305 million a year earlier
- Free cash flow: $340 million
- Significant increase from $63 million a year earlier
- Above analyst expectations of $286.7 million
Production results:
- Gold production: 948,000 ounces
- Down from 1 million ounces a year earlier
- Below analyst expectations of 956,175 ounces
- Copper production: 43,000 metric tons
- Down from 48,000 tons a year earlier
- Average realized gold price: $2,344 per ounce
- Up from $1,972 a year earlier
- Average realized copper price: $4.53 per pound
- Up from $3.70 a year earlier
Key information:
- The company maintains its gold production forecast for 2024 at 3.90-4.30 million ounces
- All-in sustaining cost (AISC) forecast remains at $1,320-$1,420 per ounce
- Barrick continues its share buyback program, acquiring 2.95 million shares in the second quarter
- Quarterly dividend of $0.10 per share announced
Barrick Gold reported a significant improvement in financial results, mainly due to higher commodity prices. CEO Mark Bristow emphasized that the company is on track to achieve its 2024 forecasts while increasing production and expanding its asset base through key projects.
It's worth noting the ambitious development plans in the copper segment. Bristow pointed to two projects: the expansion of the Lumwana mine in Zambia, which is set to increase annual copper production from 130,000 to 240,000 tons, and the Reko Diq project in Pakistan, which aims to produce 400,000 tons of copper and 500,000 ounces of gold annually.
Despite lower production compared to the previous year, Barrick Gold managed to significantly improve its financial results. The company continues its sustainable development strategy, investing in key projects while returning value to shareholders through dividends and share buybacks.
Recommendations: Barrick Gold has 22 recommendations, of which 16 are "buy" with the highest target price at $38, 6 are "hold", and 0 are "sell". The 12-month average stock price forecast is $22.16, implying a 27% upside potential compared to the current price.
Technical analysis: The stock price in pre-market trading is approaching resistance at the 38.2% Fibonacci retracement level of $17.8. A breakthrough could lead to an attempt to break out of the long consolidation channel. At the same time, the stock is trading above long-term moving averages, with the first support at the 50 SMA at $17.35. Breaking through this could lead to a quick test of the 100 SMA and seeking support at the 50% Fibonacci retracement at $16.89. RSI will be testing its resistance around 47, with still missing confirmation of bullish divergence on MACD and ADX, which continue to signal possible declines.
