Key Insights
- Using the 2 Stage Free Cash Flow to Equity, Barrick Gold fair value estimate is CA$37.55
- Barrick Gold is estimated to be 40% undervalued based on current share price of CA$22.68
- The US$29.68 analyst price target for ABX is 21% less than our estimate of fair value
Does the June share price for Barrick Gold Corporation (TSE:ABX) reflect what it’s really worth? Today, we will estimate the stock’s intrinsic value by estimating the company’s future cash flows and discounting them to their present value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. There’s really not all that much to it, even though it might appear quite complex.
We generally believe that a company’s value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you still have some burning questions about this…
