Barrick Gold (NYSE:GOLD): Evaluating Valuation Following a Year of Strong Share Price Momentum

Barrick Mining (NYSE:B) shares have shown some movement lately in line with broader trends in the mining sector. Investors may be weighing recent financial results and performance compared to the company's longer-term earnings and revenue growth momentum.

See our latest analysis for Barrick Mining.

Over the past year, Barrick Mining’s share price has experienced an impressive surge, with a year-to-date gain of more than 105%. This surge follows a particularly strong 90-day share price return of 53.5%. This suggests that momentum has been building as investors grow more optimistic about the company’s longer-term earnings trajectory and gold sector prospects. The one-year total shareholder return, which includes dividends, has reached 76%. This underscores the rewarding run for those who have held on through recent volatility.

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With such a rapid climb in Barrick Mining’s share price, the key question now is whether the stock offers real value at current levels or if future growth has already been priced in by the market.

Price-to-Earnings of 20.3x: Is it justified?

Barrick Mining is currently trading at a price-to-earnings (P/E) ratio of 20.3x. This makes the stock look attractive compared to its peers and the broader metals and mining industry.

The P/E ratio measures what investors are willing to pay today for a dollar of future earnings. For a major mining company like Barrick, this multiple reflects expectations about future profitability, sector demand, and the company’s earnings growth potential.

Barrick's P/E of 20.3x is lower than both the peer average of 21.9x and the US metals and mining industry average of 24.1x. This suggests that, despite recent share price gains, the market may not be fully pricing in Barrick’s recovery and momentum. Based on regression analysis, Barrick’s P/E is also below the estimated fair value P/E of 28.6x, a level the market could gravitate toward as growth and sector trends remain favorable.

Explore the SWS fair ratio for Barrick Mining

Result: Price-to-Earnings of 20.3x (UNDERVALUED)

However, Barrick Mining’s momentum could face challenges if gold prices soften or if revenue and net income growth rates begin to slow unexpectedly.

Find out about the key risks to this Barrick Mining narrative.

Another View: SWS DCF Model Weighs In

While Barrick Mining looks undervalued based on earnings multiples, our DCF model suggests otherwise. The SWS DCF model calculates a fair value of $24.21 per share, which is noticeably below the current price of $32.80. This signals the stock might be overvalued if cash flows fall short. How should investors weigh these two very different assessments?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Barrick Mining for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 832 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Barrick Mining Narrative

If you’ve got a different perspective or would rather dig into the numbers firsthand, it’s fast and simple to build a narrative based on your own findings, Do it your way

A great starting point for your Barrick Mining research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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