Stocks and oil futures (CLK24) might have ended lower on Monday, but gold futures (GCM24) once again ended higher, settling atop the $2,400 level as the market awaits Israel’s response to a weekend missile attack by Iran. Leaders in the U.S., UK, and France are among the Western allies urging Israel to de-escalate the situation, though IDF officials have so far indicated Israel is weighing some type of response to the strike.
Analysts at Goldman Sachs (GS) recently hiked their gold price forecast to $2,700 for this year, citing rising geopolitical tensions as demand for the safe haven increases. Bank of America also boosted its gold price forecast, with analysts there forecasting gold prices as high as $3,000 by 2025.
Against this backdrop, here are three buy-rated gold stocks investors can consider now.
Rio Tinto
Rio Tinto (RIO) is the world’s second-largest metals and mining company. It is involved in the supply of various precious and industrial metals, including aluminum (ALM24), gold, copper, uranium, and iron ore. Alongside these, it also produces industrial minerals such as borax, salt, and titanium dioxide. The British-Australian company, headquartered in London, carries out its operations in Europe, Africa, the Middle East, the Americas, and Asia-Pacific.
Rio Tinto’s shares have dipped 10.3% YTD, though they've gained over 7% in the last month on rising commodity prices.
In February, Rio Tinto reported its financial results for 2023, posting a solid free cash flow of $7.7 billion with underlying earnings of $11.8 billion for the full year. The company announced a dividend of $7.1 billion, translating to a 60% payout. Revenue fell 3% to $54.0 billion due to a fall in some commodity prices, such as aluminum, diamond, and in industrial minerals.
Analysts are very bullish on RIO stock with a consensus “Strong Buy” rating, and a mean price target of $86.50 - indicating a 29.5% upside potential to current levels. Of the 12 analysts tracking the stock, 10 have a “Strong Buy” rating and only 2 have a “Hold” rating.
Barrick Gold
Barrick Gold (GOLD) is an exploration and development company of mineral properties. It is involved in the production and sales of gold and copper (HGK24), while it also explores silver (SIK24) and energy materials. Barrick owns gold mines in Canada, Argentina, Côte d'Ivoire, the U.S., Tanzania, and Mali, among other locations. Its copper mines are located in Saudi Arabia, Zambia, and Chile. Incorporated back in 1983, it is headquartered in Toronto.
Shares of Barrick Gold have dipped about 4% so far this year, though they're up more than 10% over the past month.
Barrick Gold announced its 4Q results back on Feb. 14. The company managed to report better-than-expected earnings of $0.27 per share, while revenue came in at $3.06 billion, below analysts' estimated $3.13 billion. Management also announced a $1 billion share buyback program along with a dividend of $0.10 per share. Free cash flow increased 50% to $646 million.
For the current quarter, the company anticipates earnings of $0.19 per share, up 35.7% YoY, while full-year EPS is estimated at $0.90.
Analysts have a consensus “Moderate Buy” rating on GOLD stock, with the mean price target of $20.84 signifying about 20% upside potential to current levels. There are currently 16 analysts covering the stock, and 10 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating, and 4 have a “Hold” rating.
Franco Nevada Corp.
Franco Nevada Corp. (FNV) is a Toronto-based mining company with a focus on royalty interest in gold mining properties, platinum group metal properties, and oil and gas exploration properties. It does not operate, develop, or conduct exploration work. Founded in 1986, it operates in South America, Central America, the U.S., Mexico, Canada, and internationally, as well.
Shares of Franco Nevada have risen slowly but steadily this year, up 5% YTD and 1.7% in the past month.
Franco Nevada posted its full-year results on March 5, reporting a 7% drop in revenue to $1.22 billion, which missed analysts’ estimates. During 4Q it generated revenue of $303 million, a decline of 5.3% YoY on softer gas and platinum group prices, which was partially offset by a rise in gold prices.
The royalty company sold a total of 119,581 Gold Equivalent Ounces (GEOs) during the quarter, a decline of 7.8% due to Cobre Panama, Candelaria, and Stillwater. For the current year, it expects to sell a total of 480,000 to 500,000 GEOs, with GEOs from precious metals expected to range between 360,000 to 400,000.
Analysts are bullish on FNV stock, with a consensus “Moderate Buy” rating and a mean price target of $142.13, indicating an upside potential of 22% from current levels. Out of the 12 analysts tracking the stock, 5 have a “Strong Buy” position, 1 has a “Moderate Buy” rating, and 6 have a “Hold” rating.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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