JPM starts Barrick Mining at Overweight, flags valuation gap versus Agnico Eagle

Investing.com -- JPMorgan initiated coverage of the North American gold sector with an Overweight rating on Barrick Mining and a Neutral rating on Agnico Eagle Mines, citing a bullish outlook for gold but diverging valuation and growth profiles between the two miners.

Gold’s rally has been driven by strong central bank and ETF buying, inelastic mine supply, and uncertainty around US policy.

Gold prices have risen sharply over the past year, while gold mining stocks have more than doubled, with Barrick outperforming Agnico over that period.

Agnico and Barrick are now closely matched as the world’s second- and third-largest gold miners, but JPM says they offer contrasting investment cases.

JPM sees Agnico as the premier operator in the sector, supported by operational execution, a favorable cost structure, and a lower-risk regional footprint.

Though much of Agnico’s next phase of growth lies in the 2030s and that its current valuation looks full.

Whereas Barrick offers a large reserve base and nearer-term organic growth opportunities, though JPMorgan flagged a mixed execution history, an ongoing management transition, and exposure to higher-risk jurisdictions.

Barrick shares trade at a deeper discount to global peers than they have historically, creating scope for upside.

Both companies will generate EBITDA margins of about 75% or higher in 2026 and 2027.

While capital spending is set to rise, the free cash flow will comfortably fund investment needs and support higher shareholder returns while preserving net cash positions.

JPMorgan set a $68 price target for Barrick, based on a blended valuation approach, noting the stock trades at a discount to peers that suggests challenges in Mali are more than reflected in the share price.

Agnico’s price target was set at $248, with JPMorgan pointing to its premium valuation relative to peers as a reason to wait for a more attractive entry point.

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