Zacks Investment Research downgraded shares of Barrick Gold Corporation (ABX) from NEUTRAL to UNDERPERFORM on August 17, 2012, with a target price of $33.00.
We are downgrading our recommendation on Barrick Gold to Underperform with a target price of $33. The company's second quarter results missed the Zacks Consensus Estimates as declining production and rising costs acted as headwinds. Moreover, challenging economic conditions remain a concern for the company along with the limited supply of gold as new deposits remain scarce. In addition, the company is facing further increases in costs as the Pascua-Lama mine is facing delays and can incur additional expenses of up to $3 billion. Barrick enjoys significant leverage to gold prices. However, as witnessed in the second quarter, the advantage arising out of increased prices has been offset by higher costs, and may hurt the company further going forward.
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