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Today is shaping up negative for Barrick Gold Corporation (TSE:ABX) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Shares are up 5.8% to CA$25.97 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
Following the downgrade, the consensus from eight analysts covering Barrick Gold is for revenues of US$12b in 2025, implying a noticeable 7.5% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$15b of revenue in 2025. It looks like forecasts have become a fair bit less optimistic on Barrick Gold, given the pretty serious reduction to revenue estimates.
See our latest analysis for Barrick Gold
There was no particular change to the consensus price target of US$21.79, with Barrick Gold's latest outlook seemingly not enough to result in a change of valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Barrick Gold at US$27.15 per share, while the most bearish prices it at US$17.48. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 7.5% by the end of 2025. This indicates a significant reduction from annual growth of 0.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 15% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Barrick Gold is expected to lag the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Barrick Gold this year. They're also anticipating slower revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Barrick Gold going forwards.
Of course, there's always more to the story. At least one of Barrick Gold's eight analysts has provided estimates out to 2027, which can be seen for free on our platform here.