Key Morningstar Metrics for Barrick Mining
- : C$43Fair Value Estimate
- : ★★Morningstar Rating
- : NoneMorningstar Economic Moat Rating
- : HighMorningstar Uncertainty Rating
What We Thought of Barrick Mining’s Earnings
Barrick reported a strong first-quarter result, driven by a higher gold price and lower unit costs at stable volumes. Adjusted NPAT is up 170% from a year ago to USD 1.65 billion, or USD 0.98 per share, though down from USD 1.75 billion, or USD 1.04 per share, in the previous quarter.
Why it matters: Shares closed up 9%, likely due to it handily beating quarterly production guidance and with unit costs also coming in below full-year guidance.
- Management reiterated 2026 production and cost guidance. We don’t forecast on a quarterly basis, but with volumes likely to be seasonally higher over the remaining three quarters, the result is tracking broadly in line with our full-year expectations.
- It now intends to buy back up to USD 3 billion in shares. We previously assumed no buybacks over our forecast period and updated our estimates accordingly.
The bottom line: We retain our USD 31/C$43 fair value for no-moat Barrick.
- Shares are expensive. This is likely driven by the spot gold price of USD 4,700 per ounce being more than double our midcycle estimate of around USD 2,050 based on the long-run marginal cost of production.
Bulls say: We are in a new paradigm, and the gold price will stay higher for longer on central bank purchases, rising inflation, concerns over unsustainable government deficits amid rising bond yields, and procyclical ETF flows.
- Shares trade close to our bull case fair value of USD 45 per share. In this scenario, our assumed gold prices are about USD 5,900 per ounce on average from 2026 to 2028 and USD 2,450 midcycle from 2030, around 20% higher than in our base case.
Key stats: The new buyback is surprising as management ruled it out just last quarter in favor of increased dividends. We think this is driven by similar actions from peers such as no-moat Newmont and Agnico Eagle, but given its overvalued shares, it should consider standing apart from the crowd.
