NEW YORK (TheStreet) -- Shares of Barrick Gold Corp. (ABX) are down -2.27% to $15.53 on Wednesday, continuing a decline most of the gold sector saw on Tuesday when the group hit a 15 week low of $1,265.50 per ounce.
Gold prices have been struggling in recent weeks to move higher as conflict between Russia and the Ukraine continues, the Wall Street Journal reports.
Separately, Barrick Gold reached a deal with locals living on the Chilean-Argentine boarder that have opposed the company's South American Pascua-Lama mining project. Reuters reports.
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Following an investment of $5 million the world's largest gold miner had to pause production at the mine after environmental regulators demanded an infrastructure be built in order to prevent water pollution.
Both sides have reached an agreement which will last for six months, during that time Barrick must supply the community with details regarding its project.
TheStreet Ratings team rates BARRICK GOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate BARRICK GOLD CORP (ABX) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BARRICK GOLD CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BARRICK GOLD CORP reported poor results of -$9.63 versus -$0.35 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 89.6% when compared to the same quarter one year ago, falling from $847.00 million to $88.00 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, BARRICK GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $585.00 million or 46.08% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The share price of BARRICK GOLD CORP has not done very well: it is down 14.93% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: ABX Ratings Report