Earnings Previews: Barrick Gold, Kraft Heinz, Roblox

In mid-morning trading Monday, the Dow Jones industrials traded 0.7% higher, the S&P 500 was up 0.71% and the Nasdaq was up 0.88%.

After U.S. markets close, Palantir Technologies and Vornado Realty Trust will report quarterly results. Cleveland-Cliffs, Coca-Cola and Peabody Energy are on deck to report results first thing Tuesday morning. Then later on Tuesday, look for reports from Airbnb, Devon Energy and Livent.

Here is a look at what to expect when the following three firms report earnings before Wednesday’s opening bell.

Barrick Gold

Over the past 12 months, the price of gold has dipped by just under 1%. Barrick Gold Corp. (NYSE: GOLD) has seen its share price slide by more than 13% over the same period.

The big news in the gold fields is the $16.9 billion buyout offer from Newmont for Australia’s largest gold producer, Newcrest. Barrick CEO Mark Bristow said last week that his company would not make a competing bid. The company announced last week that its proven and probable gold reserves grew by 6.7 million ounces in 2022 to 76 million ounces at a grade of 1.67 grams per ton of rock with an assumed price of $1,300 per ounce. That is about one ounce of gold for every 17 tons of rock.

Analysts remain bullish on Barrick stock, with 19 of 25 brokerages having a Buy or Strong Buy rating while the rest have Hold ratings. At a recent share price of around $18.00, the upside potential based on a median price target of about $21.50 is 19.4%. At the high price target of $29.00, the upside potential is 61.1%.

Fourth-quarter revenue is forecast at $2.8 billion, which would be up 10.9% sequentially but down about 14.8% year over year. Adjusted EPS are forecast at $0.12, down 7.5% sequentially and by 65.7% year over year. For the full 2022 fiscal year, estimates call for EPS of $0.78, down 33.1%, on sales of $10.96 billion, down 8.5%.

Barrick stock trades at about 23.1 times expected 2022 earnings, 20.7 times estimated 2023 earnings of $0.87 and 17.5 times estimated 2024 earnings of $1.03 per share. The stock’s 52-week trading range is $13.01 to $26.07. Barrick pays an annual dividend of $0.55 (yield of 3.07%). Total shareholder return for the past year was negative 10.05%.

Kraft Heinz

Shares of Kraft Heinz Co. (NASDAQ: KHC) have added about 16% over the past 12 months, with more than half that gain coming in the past three months. For the year to date, however, the shares are down 1.5%. A solid dividend and payout ratio of 160% keeps about half the stock in the investment portfolios of institutional investors. The company does need to pay more attention to growth, but, in the meantime, its payout is enough to keep investors in the pen.

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