Barrick Gold (NYSE:GOLD) Valuation: Is the Market Underestimating Its Recent Momentum?

Barrick Mining (NYSE:B) has seen its shares move this month, attracting fresh attention from investors. After a period of relative quiet, traders are now revisiting its recent performance and assessing how its fundamentals compare.

See our latest analysis for Barrick Mining.

After a remarkable climb earlier this year, Barrick Mining’s share price momentum has cooled a bit this month. However, the 90-day share price return of 41.23% and a year-to-date gain over 100% still stand out. For investors looking further back, the 1-year total shareholder return of 83.9% and a 116.7% three-year return reinforce that sentiment toward Barrick, and perhaps the broader gold sector, has grown decidedly more optimistic lately.

If Barrick’s run has you interested in what else is out there, now is the perfect time to broaden your horizons and discover fast growing stocks with high insider ownership

But with growth metrics and past returns painting a strong picture, the question remains: Is Barrick Mining undervalued at current levels, or is the market already factoring in its future potential?

Price-to-Earnings of 20.4x: Is it justified?

Barrick Mining currently trades at a price-to-earnings ratio of 20.4x, just below the industry average. With a last close of $33.09, this positions the stock as attractively valued compared to sector peers.

The price-to-earnings (P/E) ratio measures how much investors are willing to pay for each dollar of company earnings. In the mining sector, where cyclical profits and commodity swings are common, the P/E ratio can provide insight into market optimism and expectations for future growth.

At 20.4x, Barrick’s valuation is not only beneath the US Metals and Mining industry average of 21.6x but also below the peer average. This suggests that the market is pricing Barrick more conservatively, despite recent strong profit growth, and leaves room for upside if performance continues to impress. According to fair value regressions, an estimated fair price-to-earnings ratio could sit as high as 25.6x, which highlights further potential for rerating if confidence stays strong.

Explore the SWS fair ratio for Barrick Mining

Result: Price-to-Earnings of 20.4x (UNDERVALUED)

However, slowing revenue growth and possible shifts in gold prices could limit Barrick's momentum. This reminds investors that risks remain part of the equation.

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

Another View: What Does the SWS DCF Model Suggest?

While Barrick Mining looks undervalued based on its price-to-earnings ratio, our DCF model offers a very different perspective. According to this method, the current share price of $33.09 is actually above its estimated fair value of $22.59, suggesting the stock could be overvalued if future cash flows fall short of expectations. So, which view should investors trust—a market based on earnings or long-term cash flow fundamentals?

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 870 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 see the story differently or want a hands-on approach, you can quickly analyze the data and develop your own personal perspective in just a few minutes. 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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