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Investing.com -- Bank of America (NYSE:BAC) revised ratings on two major players in the precious metals sector, downgrading Barrick Gold Corp. (NYSE:GOLD) to Neutral and double-upgrading Kinross Gold (TSX:K) (NYSE:KGC) Corp. to Buy.

The revisions come as the companies prepare to release their earnings for the fourth quarter of fiscal 2024, starting with Barrick Gold, Kinross Gold, and Royal Gold (NASDAQ:RGLD) on February 12, 2025. The earnings season will then move into full swing the week of February 17 to 21, 2025.

Analysts are focusing on several key themes, including average gold prices, which stood at $2,661 per ounce in Q4’24, showing a 7% increase quarter-over-quarter and a significant 35% rise year-over-year. With gold prices climbing an additional 6% year to date in 2025, earnings commentary is expected to be positive.

“Our North American precious metals coverage is forecast to generate free cash flow (FCF) of around $3 billion (bn) in Q4’24, with more expected in 2025E,” BofA analysts led by Lawson Winder said in a note.

“With the robust FCF generation, focus will be on capital allocation priorities. Recent commentary points to growth as a priority over capital returns. Those that instead prioritize capital returns should see their share prices outperform,” they added.

BofA’s double upgrade of Kinross shares comes amid the bank’s confidence in the miner’s ability to address previous concerns such as mine life, production sustainability, and unit costs.

The analysts have increased their expectations for Kinross's 2026 gold equivalent ounces (GEO) production to 2 million GEO and raised their earnings per share (EPS) projections.

Despite the market's apprehension regarding potential corporate acquisitions by Kinross, the company has demonstrated discipline, which, coupled with the possibility of increased capital returns through share buy-backs in 2025, supports a more favorable outlook.

On the other hand, Barrick Gold's downgrade is attributed to increasing risks in guidance, especially with the ongoing tax and royalty disagreement leading to the shutdown of the Loulo-Gounkoto mine in Mali and challenges in ramping up operations at the Pueblo Viejo mine in the Dominican Republic.

As a result, BofA has decreased its net asset value (NAV) estimate for Barrick Gold by 5% to $15.60 per share and lowered its target price to $18 from $21.

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