Market Overview

5 Reasons Why RBC Turned Cautious On Barrick Gold

5 Reasons Why RBC Turned Cautious On Barrick Gold
Related ABX
Benzinga's Top Upgrades, Downgrades For August 29, 2018
Benzinga's Top Upgrades, Downgrades For July 30, 2018
Imminent Move Downward In Gold (Seeking Alpha)

Canadian mining company Barrick Gold Corp (NYSE: ABX) has succeeded in restructuring, decentralizing and strengthening its balance sheet, but now faces five new challenges, according to RBC Capital Markets. 

The Analyst

RBC's Stephen Walker downgraded Barrick Gold from Outperform to Sector Perform with a price target lowered from $16 to $14.

The Thesis

Walker named five reasons why a bullish stance on the stock can no longer be justified. (See the analyst's track record here.)

They are: 

  • Ongoing disputes with the government of Tanzania related to its local subsidiary Acacia Mining.
  • The second-quarter earnings report made no reference to the previously announced $5-billion debt target, which may imply new investments will be made.
  • The company's enhanced strategic cooperation agreement with Shandong implies a potential asset sale or asset swap agreement will be seen.
  • Barrick Gold's stock continues to show weakness that could be attributed to the less competitive Canadian dollar, especially in terms of seeking American acquisitions.
  • Barrick needs to identify a president or co-president to communicate a new set of strategic priorities.

Price Action

Barrick Gold shares were down 0.62 percent at $11.16 at the time of publication Monday. 

Related Links:

Commodities 101: Gold Futures

Morgan Stanley Prefers Newmont Mining Over Barrick Gold

Photo courtesy of Barrick Gold. 

Latest Ratings for ABX

Sep 2018JP MorganMaintainsNeutralNeutral
Aug 2018CitigroupUpgradesSellNeutral
Aug 2018JefferiesDowngradesBuyHold

View More Analyst Ratings for ABX
View the Latest Analyst Ratings

Posted-In: Canada GoldAnalyst Color Downgrades Price Target Commodities Markets Analyst Ratings Best of Benzinga


Related Articles (ABX)

View Comments and Join the Discussion!

Mid-Day Market Update: NASDAQ Down Over 1%; Shares Plummet

Cowen Raises AMD Price Target After CEO Meeting