Investing

Earnings Previews: Albemarle, APA, Barrick Gold, Cameco

The current geopolitical tensions pushed gold futures to a high in early March of around $2,000 and Barrick stock to a 52-week high at the same time. A strong dollar, a 10-year Treasury note carrying a 3% interest rate and an expected federal interest rate hike on Wednesday have combined to weigh on the price of gold in the past few weeks. Unlike the dollar and U.S. Treasuries, gold is a non-yielding asset that raises the opportunity cost of holding the yellow metal instead of dollars or Treasury notes.

Analysts remain bullish on Barrick stock, with 19 of 25 brokerages having a Buy or Strong Buy rating while the rest have a Hold rating. At a share price of around $22.20, the upside potential based on a median price target of $28 is about 26.1%. At the high price target of $31.75, the upside potential is 43%.

First-quarter revenue is forecast at $2.78 billion, down 15.9% sequentially and about 6.1% lower year over year. Adjusted EPS are forecast at $0.24, down 31.8% sequentially and down 17.2% year over year. For full fiscal 2022, estimates call for EPS of $1.15, down 0.6%, on sales of $12.05 billion, down 0.5%.

Barrick stock trades at 19.2 times expected 2022 earnings, 17.8 times estimated 2023 earnings of $1.24 and 18.2 times estimated 2024 earnings of $1.22 per share. The stock’s 52-week range is $17.27 to $26.07. Barrick pays an annual dividend of $0.37 (yield of 3.57%). Total shareholder return for the past year was 8.2%.

Cameco

Over the past year, Canada-based uranium producer Cameco Corp. (NYSE: CCJ) has seen its share price rise by nearly 52%. At its peak in mid-April, the stock was up about 88% at a level it had not seen in nearly 11 years. Since the April peak, uranium prices have dropped by almost $11 a pound (about 16%). Cameco reports results first thing Thursday morning.

The U.S. Securities and Exchange Commission on Friday rejected an application from Sprott Asset Management to list the firm’s Physical Uranium Trust ETF on a U.S. exchange. The Sprott ETF has been driving uranium prices higher since mid-August, while trading on the Toronto Stock Exchange and over-the-counter (SRUUF) in the United States. Uranium prices ticked up a bit following the SEC announcement.

Analysts are solidly bullish on Cameco stock. Of 12 brokerages covering the shares, all have a Buy or Strong Buy rating. At a share price of around $25.50, the upside potential based on a median price target of $36.43 is 42.9%. At the high price target of $36.95, the upside potential is about 44.9%.

First-quarter revenue is forecast at $312.45 million, down 15% sequentially but up 35.4% year over year. Analysts expect Cameco to post an adjusted loss per share of $0.01, down from EPS of $0.05 in the prior quarter but better than the year-ago loss of $0.06 per share. For the full fiscal 2022 year, EPS currently are forecast at $0.20, better than the $0.20 per share loss last year, on sales of $1.38 billion, up 18.1%.


Cameco stock trades at 129.1 times expected 2022 earnings, 38.1 times estimated 2023 earnings of $0.67 per share and 34.1 times estimated 2024 earnings of $0.75 per share. The stock’s 52-week range is $15.31 to $32.49. Cameco pays an annual dividend of $0.06 (yield of 0.25%). Total shareholder return for the past year was 51.8%.

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