Is It Too Late To Consider Barrick Mining (TSX:ABX) After A 208% One-Year Rally?

• If you are wondering whether Barrick Mining is still good value after its recent run, this article will walk through what the current share price might reflect about the business.
• The stock last closed at $69.12, with returns of 0.2% over 7 days, 12.2% over 30 days, 14.2% year to date and 208.2% over the past year. This naturally raises questions about how much optimism is now priced in.
• Recent news flow around Barrick Mining has focused on its position in the materials sector and investor interest in companies linked to commodity cycles, which helps explain why the share price has been in focus. These stories have put more attention on whether the current valuation still lines up with the fundamentals.
• On our checks, Barrick Mining scores 5 out of 6 on valuation, based on our valuation score of 5. Next, we will look at how different valuation methods assess the stock and then finish with a way of thinking about value that can help tie those methods together.

Barrick Mining delivered 208.2% returns over the last year. See how this stacks up to the rest of the Metals and Mining industry.

Approach 1: Barrick Mining Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth today by projecting its future cash flows and discounting them back to a present value.

For Barrick Mining, the model uses a 2 Stage Free Cash Flow to Equity approach based on its last twelve month free cash flow of about $2.57b. Analyst sourced and extrapolated projections suggest free cash flow reaching around $10.41b in 2030, with a path of annual figures between 2026 and 2035 that are discounted back to estimate today’s value.

Pulling these cash flows together, the model arrives at an estimated intrinsic value of $186.90 per share. Compared with the recent share price of CA$69.12, this indicates an implied discount of about 63.0%, which points to the stock trading well below this DCF based estimate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Barrick Mining is undervalued by 63.0%. Track this in your watchlist or portfolio, or discover 871 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Barrick Mining.

Approach 2: Barrick Mining Price vs Earnings

P/E is a common way to value profitable companies because it links what you pay for each share to what the business currently earns per share. Investors usually accept a higher P/E when they expect stronger growth or see lower risk, and a lower P/E when growth expectations are more modest or the risk profile is higher.

Barrick Mining is currently trading on a P/E of 23.53x. That is slightly below the Metals and Mining industry average P/E of 25.27x and well below the peer group average of 45.32x. On the surface, this suggests the market is assigning a lower earnings multiple than many comparable companies.

Simply Wall St’s Fair Ratio for Barrick Mining is 26.99x. This is a proprietary estimate of what the P/E could reasonably be, given factors such as the company’s earnings growth profile, industry, profit margins, market cap and risk characteristics. Because it blends these company specific inputs, the Fair Ratio can be more tailored than a simple comparison with industry or peer averages.

Comparing the Fair Ratio of 26.99x with the current P/E of 23.53x indicates that Barrick Mining is trading below this Fair Ratio based estimate on an earnings multiple basis.

Result: UNDERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1446 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Barrick Mining Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St’s Community page you can use Narratives, where you set a clear story for Barrick Mining, link that story to your own forecasts for revenue, earnings and margins, see how that rolls into a fair value, compare it with the current price to decide whether the stock looks expensive or cheap for you, and then watch your view update automatically as new news or earnings arrive. For example, one investor might build a Narrative around Barrick trading at about CA$48.07 with their fair value closer to CA$56 to CA$60. Another might anchor on analyst consensus around CA$37.98 with fair value scenarios ranging from roughly CA$31.15 to about CA$65.36. Both are valid as long as the story, the numbers and the fair value stay consistent with each other.

Do you think there’s more to the story for Barrick Mining? Head over to our Community to see what others are saying!

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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