If you have ever wondered whether Barrick Mining is trading at a bargain or poised for more gains, you are definitely not alone. Valuation is the big question on investors’ minds right now.
While Barrick’s stock dipped by 0.9% over the past week, it has actually soared an impressive 13.3% in the last month and is up a stunning 123.9% year-to-date.
These remarkable moves have been matched by a surge of attention after Barrick Mining announced a major exploration partnership and saw increased institutional investment, fueling speculation about long-term growth and sector leadership.
On our 6-point valuation check, Barrick scores 5 out of 6, suggesting real value. Here is a deeper look at how those valuation approaches compare, plus one perspective at the end that you truly should not miss.
A Discounted Cash Flow (DCF) model estimates the current value of a company by forecasting its future cash flows and discounting them back to today’s dollars. This approach captures both analyst estimates and longer-term projections, providing a holistic picture of what Barrick Mining could be worth based on its anticipated ability to generate cash.
For Barrick Mining, the most recent Free Cash Flow reported was $2.57 Billion. Analyst forecasts suggest steady growth, with cash flows reaching $9.07 Billion by 2029. The first five years are based on direct analyst estimates, while longer projections are internally extrapolated. This combination offers a forward-looking perspective rooted in today’s financial performance.
After applying the DCF analysis, Barrick’s estimated intrinsic value stands at $198.05 per share. The stock is currently trading at a price nearly 74.0% below this valuation, which suggests the company may be significantly undervalued compared to what its future cash generation could support.
The Price-to-Earnings (PE) ratio is a trusted metric for valuing profitable companies like Barrick Mining, as it directly compares a company’s share price to its earnings. Investors favor the PE ratio because it provides a quick sense of how much they are paying for each dollar of earnings, making it especially useful for established, consistently profitable businesses.
What constitutes a “normal” or “fair” PE ratio often depends on expected future growth and the risks involved. Companies with higher anticipated earnings growth or lower risk profiles generally command a higher PE ratio, while those facing uncertainties or slower growth tend to trade at lower multiples.
Currently, Barrick Mining trades at a PE ratio of 17.2x. For context, the Metals and Mining industry trades at a slightly higher average of 18.4x, and Barrick’s peer group median comes in at 32.2x, a notable premium. Rather than just comparing to these broad benchmarks, Simply Wall St introduces the concept of a “Fair Ratio.” For Barrick, that stands at 25.3x. This proprietary calculation considers Barrick’s growth outlook, risk factors, profit margins, market cap, and industry positioning, allowing for a more tailored assessment than generic industry comparisons alone.
With Barrick’s PE ratio standing well below its Fair Ratio, the stock appears undervalued on a multiple basis. The numbers suggest the market is not fully recognizing Barrick’s longer-term earnings potential and risk profile.
Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple, accessible way for investors to tell the story behind the numbers, connecting their own outlook on Barrick Mining’s business, future revenue, margins, and fair value directly to a personalized financial forecast.
Instead of just relying on broad metrics, Narratives tie your perspective or expectations about Barrick’s prospects to the numbers, generating a fair value that adjusts as your viewpoint or the market changes. On Simply Wall St’s Community page, millions of investors use Narratives as an intuitive tool to clarify their thinking, whether that means believing Barrick will outperform if gold demand surges, or being more cautious due to operational risks.
Narratives make decision-making easier: you can quickly compare your calculated Fair Value to Barrick’s current share price to decide if it’s time to buy or sell, and since Narratives update dynamically whenever news or earnings are released, you always have the latest view. For Barrick Mining, community Narratives currently range from a bullish fair value of CAD 60 if gold’s safe-haven demand spikes, to a more conservative CAD 31.15 if risks play out or growth lags, reminding us that each investor’s unique story shapes their investment approach.
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.
Companies discussed in this article include ABX.TO.
