UBS Boosts Gold Stocks Amid Market Volatility

UBS upgrades Barrick and Newmont, predicting a favorable future for gold stocks amid turbulence. Investors are eagerly awaiting upcoming earnings reports this month that may validate bullish sentiments.

Date: 11-04-2025

AI Rating: 8

Market Overview: The recent economic developments, particularly the heightened tariff tensions between the U.S. and China, have created market uncertainty. Despite this, gold stocks such as Barrick Gold and Newmont are showing significant gains, suggesting a shift toward safe-haven assets amid geopolitical volatility.

Earnings Outlook: Investors are focusing on upcoming earnings reports for Barrick on April 29 and Newmont on April 23. Newmont is projected to have a forward P/E ratio of 8.4, indicating substantial profit growth expectation. Barrick, with a forward P/E of 11.6, appears to have a more stable valuation. This compelling earnings forecast significantly impacts potential stock price performance, likely positioning both companies favorably in the markets.

Investment Recommendations: UBS's upgrade of both Barrick and Newmont reflects a positive outlook. The analyst note indicates a broader gold price environment bolstered by uncertainties in the market. As UBS outlined, gold is expected to reach $3,500 per ounce by 2026, indicating that gold equities could follow suit due to generational macroeconomic events. Thus, both companies might benefit from increased demand for gold as a hedge.

Free Cash Flow and Profitability: Barrick Gold’s positive free cash flow of $1.3 billion underlines its financial health compared to Newmont ($3 billion) and Coeur Mining, which is not generating positive cash flow. This distinction suggests that Barrick is a more attractive investment choice, given its capacity to generate revenue in a challenging environment, which could support its stock price in the near term.

Conclusion: As professionals track these developments, the anticipated earnings will significantly impact market sentiment toward these gold stocks. The bullish sentiment from UBS, coupled with positive earnings projections and solid cash flow metrics, positions Barrick and Newmont favorably in the coming months, making them potential holdings for investors seeking exposure to gold in an unstable economic environment.

Stocks: GOLD NEM CDE