According to analyst The Street in New York, shares of Barrick Gold were getting a lift, higher by 3.43% to $11.76 (K30.58) in late morning on Friday trading, helped by climbing gold prices as investors seek safety from market volatility after the Swiss central bank unexpectedly abandoned its three-year cap on the franc, citing a report from CNBC.
Spot gold was up 0.84% to $1271.71 (K3307) as of 11:07 a.m. ET Friday. On the day before, the precious metal posted its biggest gain for the day in six weeks, rising 2.6% following the Swiss National Bank’s move.
Canada-based Barrick operates mines and advanced exploration and development projects in Canada, the U.S., Dominican Republic, Australia, Papua New Guinea (Porgera), Peru, Chile, Argentina, Zambia, Saudi Arabia and Tanzania.
"We rate Barrick Gold Corp a sell. This is driven by multiple weaknesses, which we believe should have a greater impact than any strength, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover.
"The company’s weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share," TheStreet rated.
As highlighted in the analysis by TheStreet Ratings and among others; the company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry.
The net income has significantly decreased by 27.3% when compared to the same quarter one year ago, falling from $172.00 million (K447.33 million) to $125.00 million (K325.09 million).
Net operating cash flow has decreased to $852.00 million (K2215.86 million) or 30.78 per cent when compared to the same quarter last year.
Despite a decrease in cash flow of 30.78%, Barrick is in line with the industry average cash flow growth rate of -31.38%. It further stated that the miner’s earnings per share declined by 38.9% in the most recent quarter compared to the same quarter a year ago.
The company has reported a trend of declining earnings per share over the past two years.