Denver, Colorado-based Newmont Corporation (NEM) is a mining company specializing in the exploration and production of gold, along with copper, silver, zinc, and lead. Focused primarily on gold, Newmont holds a market cap of $52.1 billion and operates across the Americas, Caribbean, Africa, and the Asia-Pacific regions.
Shares of the mining titan have trailed behind the broader market over the past year. Over the past 52 weeks, NEM stock has gained 17.3% compared to the S&P 500 Index’s ($SPX) 31.1% returns. In 2024, NEM is up 10.6%, compared to the SPX’s 19.8% gains on a YTD basis.
Zooming in further, NEM has underperformed the Ishares MSCI Global Gold Miners ETF’s (RING) 40.3% returns over the past 52 weeks and 32.1% gains on a YTD basis.
On Oct. 23, NEM released its Q3 earnings, and its shares dropped 15.9% for the week despite gold prices reaching new highs. Its earnings missed estimates due to rising labor costs, which squeezed profit margins. Zooming in, the stock fell 14.7% on Oct. 24 and continued to slide in the next trading session. While Newmont is pursuing asset divestments and a share repurchase program to boost shareholder value, it faces ongoing cost pressures and a modest cut in long-term production targets.
For the current fiscal year, ending in December, analysts expect Newmont’s EPS to improve 93.8% year over year to $3.12. The company’s earnings surprise history is mixed. It beat the consensus estimate in two of the past four quarters while missing the forecasts on two other occasions.
Among the 16 analysts covering the NEM stock, the consensus rating is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings, one “Moderate Buy,” and eight “Holds.”
This configuration is slightly less bullish than a month before, with ten analysts recommending a “Strong Buy.”
On Oct. 30, UBS Group AG (UBS) downgraded Newmont from “Buy” to “Neutral,” lowering the price target from $67 to $54. The firm cited concerns over Newmont’s ability to meet guidance and sustain market confidence, adjusting medium-term forecasts for production and free cash flow based on Q3 guidance, which could impact Newmont's cash returns relative to peers.
NEM’s mean price target of $59.11 represents a premium of 29.2% from current price levels. The Street-high target of $72.32 indicates a potential upside of 58%.
On the date of publication, Kritika Sarmah 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.
