Boston, MA 01/22/2014 (wallstreetpr) – Barrick Gold Corporation (USA) (NYSE:ABX) operates in the troubled gold business. The company is engaged in the production and selling of gold. It also performs related activities in this industry. Like most other players in the gold market, the company is affected by poor prices, low demand for gold and oversupply of the commodity in the market.
The result of all these is that the company is confronted by revenue and profit decline. In order to deal with these pressures, the company embarked on cost reduction, increased focus on high-margin activities and withdrawal from lackluster operations; as this happened, analysts fueled investor exit from the stock with bearish articles which came in quick successions.
The situation has not improved though. Barclays is the latest rating firm to cut its price target on the stock from $23 to $20. The rating agency now has an equal weight view on the stock.
Barrick Gold Corporation (USA) (NYSE:ABX) has been a subject of analysts downgrades since the year started. Besides Barclays, other equities rating firms which have issued downgrade notes on the stock this year include Canaccord Genuity, Cormark and Haywood Securities. The stock now carries consensus “hold” with price target of $20.72. Currently the stock is trading in the range of $19.
Stock performance
Nonetheless, shares of Barrick Gold Corporation (USA) (NYSE:ABX) have shown rare strength even in the face of analysts downgrade notes. The stock is seen climbing in recent times and this is indication that investors are reading correctly the adjustment the company is making in its business.
Earnings data
Barrick Gold Corporation (USA) (NYSE:ABX) issued its latest earnings in October whereby it reported earning 58 cents per share on revenue of $2.99 billion. These figures exceeded analysts’ estimates. The company managed to beat Thomson Reuters’ consensus estimate in the quarter for both earnings and revenue due to its ongoing retooling efforts.
Once the ongoing restructuring and completed, it will be easy for Barrick Gold Corporation (USA) (NYSE:ABX) to improve its performance significant and thus return value to investors.
