Barrick Gold Corporation had a strong 2023 earnings season. The company benefitted from the gold price staying above US$1,900, resulting in increased net earnings per share by 200%. Despite this success, Barrick Gold’s share price is trading closer to its 52-week low of $18.65 due to the overall stock market sentiment. Barrick Gold has maintained a strong balance sheet, with a net debt of just $578 million and increased its free cash flow by 50% to $646 million.
The stock has fallen 16.5% since January 15, 2024, in part due to fears of an interest rate hike. However, given recent economic events such as Japan and the United Kingdom falling into a recession, gold prices are expected to remain high throughout 2024, which could impact Barrick Gold’s stock price.
Investors considering Barrick Gold’s stock as an option should weigh the potential for a 20-25% surge in the stock price over the short term, particularly in the event of a global recession. However, the company’s performance should be monitored, as gold tends to underperform in a weak economy.
It is also important to recognize that while Barrick Gold presents an opportunity for investors to capitalize on gold price fluctuations, it is beneficial as a diversification tool for portfolio across asset classes. Nevertheless, potential investors should also consider other stock options, as Barrick Gold is one of the 10 best stocks for investors to buy according to The Motley Fool’s Stock Advisor Canada analyst team.
