In 2024, gold (GCQ24) has reasserted itself as a safe haven amid global geopolitical uncertainties, with prices bolstered to record highs by substantial purchases from central banks, particularly China. According to the 2024 Central Bank Gold Reserves (CBGR) survey, 29% of central bank respondents plan to increase their gold holdings next year, the highest level since the survey began in 2018.
Despite a recent pullback in gold prices, attributed to the People's Bank of China pausing its gold accumulation, JPMorgan (JPM) analysts remain "structurally bullish" on gold, foreseeing an 8% to 10% rise by year-end with a target of $2,600 per ounce in 2025. As the precious metal gears up for the next leg of its rally, gold producer B2Gold Corp. (BTG) could be an ideal investment candidate, offering investors an attractive valuation and significant growth prospects.
About B2Gold Stock
Founded in 2007, Canada-based B2Gold Corp. (BTG) is a leading international low-cost gold producer. Valued at a market cap of about $3.5 billion, the company operates mines in Mali, Namibia, and the Philippines, with its Goose Project under construction in northern Canada. Plus, with additional development and exploration projects in Mali, Colombia, and Finland, B2Gold is dedicated to maximizing mine profits, advancing new projects, and exploring fresh opportunities.
Shares of B2Gold have plunged 25.9% over the past 52 weeks and 16.3% on a YTD basis.
On May 7, B2Gold declared a quarterly dividend of $0.04 per share, payable to its shareholders on June 24. Its annualized dividend of $0.16 per share translates to an attractive 6.04% dividend yield. With a healthy payout ratio of 64.44%, the company is committed to returning value to its shareholders.
Apart from its highly appealing annual dividend yield, the stock is trading at 10.01 times forward earnings and 1.80 times sales, lower than its own five-year averages of 11.62x and 3.11x, respectively. Plus, considering BTG stock’s 23.5% above-average earnings growth projected over the next three to five years, its 0.43x price/earnings-to-growth (PEG) ratio appears quite reasonable.
B2Gold Beats on Q1 Earnings
Following B2Gold’s better-than-expected Q1 earnings results on May 7, the stock jumped nearly 3.2% in the subsequent trading session. The company’s revenue of $461.4 million surpassed Wall Street’s expectations by almost $18 million. B2Gold achieved total gold production of 225,716 ounces, which aligned with the company’s forecasts. On an adjusted basis, the company’s EPS of $0.06 edged past the consensus estimate by a penny.
As of March 31, the company held cash and cash equivalents of approximately $568 million, a significant jump from $307 million at the end of December 2023. During the quarter, B2Gold secured a game-changing $500 million upfront payment through a series of prepaid gold sales (Gold Prepay). This move enhances the company’s financial flexibility and liquidity, supporting ongoing operations and future growth projects in Namibia and Colombia, cementing B2Gold's position for sustainable growth in the global market.
For fiscal 2024, management anticipates gold production to range between 860,000 ounces and 940,000 ounces, remaining steady aside from a potential dip in Q3 output. To support its ongoing operations, the company forecasts consolidated cash operating costs to range between $835 per ounce and $895 per ounce.
Analysts tracking B2Gold expect the company’s profit to decline slightly to $0.27 per share in fiscal 2024 before improving by 63% to $0.44 per share in fiscal 2025.
What Do Analysts Expect For B2Gold Stock?
Analysts are highly bullish on the stock. BTG has a consensus “Strong Buy” rating overall. Out of the 13 analysts covering the gold miner, nine suggest a “Strong Buy,” two recommend a “Moderate Buy,” and the remaining two give a “Hold” rating.
The average analyst price target of $4.27 indicates an impressive potential upside of 61.1% from the current price levels. The Street-high price target of $6.30 suggests that the stock could rally as much as 137.7%.
On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.