Haywood Securities Reiterates Sector Outperform on Barrick Gold (ABX)

Haywood Securities is out with a research report this morning, where it reiterates its Sector Outperform rating on Barrick Gold Corp. ABX; it has a $56.00 price target on the stock. The HS analysts cited the company’s most recent earnings report, which beat the Street’s consensus on EPS; cash cost per ounce of gold was $457 during the quarter, which was high than expected. The analysts also cited Barrick’s year-to-date production of 4.0 million ounces of gold and 202 million pounds of copper, saying that ABX still sees a yearly production of 7.6 to 8.0 million pounds of gold. In regards to valuation, the Haywood analysts said, “Our $56.00 target is based on an 11.5x multiple to our 2011E cash flow of US$4.70 per share at a 2011E gold price of US$1,250 per ounce. The Company’s peer group currently trades at an average of 9.8x 2011E CFPS, a multiple we expect to expand as gold trends higher in the fall, and stocks recover from the recent sell-off.”