Goldman Removes Barrick Gold From 'Conviction Buy' List, Maintains Buy Rating

Goldman Sachs’ Andrew Quail believes Barrick Gold Corporation (USA) (NYSE: ABX) shares are well positioned to outperform peers and continue to “flag idiosyncratic opportunities.” Furthermore, the firm believes the company’s self-help story remains intact.

Quail maintains a Buy rating on the company with a price target of $27 despite removing the issue from its "Conviction Buy" List.

Removed From Conviction List

The analyst removed the stock from the Conviction List, given that the share price declined 27 percent since end-June as compared to the 14 percent decline in the GDX and 7 percent increase in the SPX.

Related Link: Deutsche Bank Upgrades 7 Precious Metals And Mining Stocks

Quail believes there has been “a visible acceleration in macro headwinds recently, negatively impacting gold prices,” which has primarily been driven by “a shift in the market’s expectations for the future path of US interest rates, evidenced by the stronger USD.”

Key Catalysts

On the other hand, the analyst believes one of the key catalysts for Barrick Gold is the sale of additional non-core assets and sees several divestiture candidates in the company’s portfolio, which could allow Barrick Gold to achieve its debt reduction goal for 2016 of $2 billion.

In addition, Quail expects the company to “soon begin construction of some of its projects with potential for strong organic growth,” and stated that the “four projects outlined at the Investor Day in February this year are most likely to be approved by the company, in our view.”

In Wednesday's pre-market session, Barrick Gold was up 1.94 percent at $15.75.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!