Will Barrick Gold (ABX) Stock Be Positively Impacted By This Analyst Upgrade?

NEW YORK (TheStreet) -- Barrick Gold (ABX) was upgraded to "conviction buy" from "buy" at Goldman Sachs  (GS) with a $22 price target today.  

The firm cited improving operational profile, free-cash-flow generation, portfolio optimization, and growth in copper production. 

Shares of Barrick Gold are up 1.08% to $18.69 in pre-market trade.

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 a number of negative factors, 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. Among the areas we feel are negative, one of the most important has been weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has decreased to $488.00 million or 46.19% 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Metals & Mining industry average, but is greater than that of the S&P 500. The net income increased by 96.8% when compared to the same quarter one year prior, rising from -$8,555.00 million to -$269.00 million.
  • ABX, with its decline in revenue, underperformed when compared the industry average of 0.2%. Since the same quarter one year prior, revenues fell by 24.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ABX's debt-to-equity ratio of 0.99 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.29 is sturdy.

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