Valued at $59.2 billion by market cap, Denver, Colorado-based Newmont Corporation (NEM) is a leading global gold producer. As a major player in the mining sector, the company is known for its extensive portfolio of active mines and significant contributions to the gold industry.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Newmont fits this criterion perfectly. Newmont is renowned for being the world's largest gold mining company, coupled with its comprehensive and diversified asset base that spans across major gold-producing regions and includes significant holdings in copper, silver, zinc, and lead.
However, the gold and copper miner pulled back 4.8% from its 52-week high of $53.88, achieved on Aug. 30. Shares of Newmont have risen 24.2% over the past three months, outpacing the broader iShares U.S. Basic Materials ETF’s (IYM) 2.3% dip over the same time frame.
Longer term, NEM stock is up 23.9% on a YTD basis, overshadowing IYM’s 1% gain. Moreover, shares of Newmont have surged 32.5% over the past 52 weeks, compared to IYM’s 6.4% return over the same time frame.
NEM stock has been trading above its 50-day moving average since late March and has remained above its 200-day moving average since late May, indicating a bullish price trend.
Newmont has outperformed due to its successful execution of the Newcrest acquisition synergies, a significant rally in gold prices driven by lower anticipated interest rates, and a robust second-half production ramp that has bolstered investor confidence. However, despite beating Q2 profit estimates with strong production and higher gold prices on Jul. 24, the stock tumbled 4.2% the following day due to the higher-than-expected rise in all-in-sustaining costs, which increased to $1,562 per ounce, and concerns over the implications of its asset divestitures on the company’s strategic outlook.
In comparison, its rival, Barrick Gold Corporation (GOLD), is underperforming NEM. Shares of Barrick Gold have gained 22.6% over the past 52 weeks and 8.9% on a YTD basis.
Despite the NEM’s relatively strong price action over the past year, analysts are cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 17 analysts covering the stock, and the mean price target of $52.16 suggests a premium of just 1.7% to current levels.
On the date of publication, Sohini Mondal 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.
