Mining stocks are often a rollercoaster ride, but when a major investment bank like Jefferies maintains a Buy rating on a heavyweight like Barrick Gold (NYSE: GOLD), it’s worth paying attention. With a price target of $26.00, the investment firm sees big potential, especially as Barrick expands its copper business.

27% Up, Still Undervalued

Barrick Gold’s stock is already up 27% year-to-date, currently trading around $19.56. Despite this impressive momentum, analysts argue that the stock remains significantly undervalued.

Barrick’s gold operations are priced at 50% less than its biggest competitors, a gap that might not last forever.

Jefferies analysts highlight Barrick’s ability to stabilize its “Real Costs” at $1,250 per ounce, which could generate a whopping 20% free cash flow (FCF) at current gold and copper prices.

Skeptical Signs

Barrick is undoubtedly a global powerhouse, but it has its fair share of challenges. One major concern is its African assets, particularly the Loulo-Gounkoto mine in Mali, which recently faced a $438 million dispute settlement with the Malian government. While the agreement could smooth things over, geopolitical risks remain a wildcard for investors.

Another issue is operational costs. While Barrick’s cost-cutting efforts are impressive, its All-In Sustaining Costs (AISC) have risen 6.37% to $1,451 per ounce. That’s not ideal in an industry where efficiency is everything.

Barrick Gold: Hot or Not?

While Jefferies is bullish, other analysts are split.

• UBS recently upgraded Barrick to a Buy, citing a strong gold price outlook and a solid asset base.
• Raymond James adjusted its price target to $23.00 (down from $24.00) but maintained an Outperform rating.
• Goldman Sachs raised its gold price forecast, which could be a tailwind for mining stocks like Barrick.

Barrick Gold is in a unique position. It’s one of the few mining companies offering both gold stability and copper growth potential, yet its stock remains undervalued relative to peers.

With a strong financial profile (current ratio: 2.89x), 39 consecutive years of dividends, and a booming copper business, it’s hard to ignore the upside.

For long-term investors, Barrick might just be a hidden gem waiting to shine. But in the short term, be prepared for some turbulence.