Gold miner Newmont beat forecasts for the fifth consecutive quarter. Why did the stock plummet?

American leading gold mining company Newmont reported exceeding quarterly revenue and profit forecasts. The company's financial results were better than market expectations for the fifth consecutive quarter. However, the positive reporting did not keep quotations from falling: the securities of the world's largest gold producer collapsed due to the risks of reduced profitability and production volumes.

Newmont's adjusted earnings for the fourth quarter of 2025 reached $2.52 per share on revenue of $6.8 billion against the FactSet consensus forecast of $2.05 and $6.2 billion, writes Barron's. That included a 20% increase in gold sales in the October-December period to $5.8 billion. For the full year 2025, the corporation reported revenue of $22.7 billion and earnings of $6.89 per share, also beating Wall Street expectations. Annual gold sales brought Newmont $19.3 billion, showing an increase of 23%. The average realized price of the precious metal soared 45% to $3498 an ounce versus $2408 at the end of 2024, according to Barron's.

After the publication of the report, Newmont shares at the postmarket in New York first rose by 2%, but then collapsed by 3.6%. On February 20, after the opening of the exchange in Sydney, the fall in quotations accelerated - the drawdown during Australian trading reached 5.5%, according to Yahoo Finance data.

Investor sentiment was worsened by Newmont's forecast, according to which gold production in 2026 will be lower than last year's level. The company forecasted production of 5.3 million troy ounces against 5.89 million ounces last year. The company's chief operating officer Natasha Villune said the projected decline was due to the planned sequence of mine development as well as the effects of December's wildfires in Australia, Stocktwits reported.

An additional reason for investors' concern was Newmont's press release about the reduction of gold reserves by the end of 2025 to 118.2 million ounces from 134.1 million ounces a year earlier. The company's management explained this dynamics by the sale of some assets and natural depletion of mines. In addition, the gold content in identified and estimated ore resources fell from 0.59 to 0.58 grams per ton, which, as a rule, means higher production costs, states Finimize. Resources reflect an overall preliminary estimate of potentially recoverable gold in the subsurface, while reserves reflect only that portion of the resource that has been proven to be economically viable and feasible to mine.

In February 2026, several banks and investment companies raised their target prices on Newmont shares while maintaining their previous ratings. According to MarketScreener, the most significant revision was made by Jefferies, increasing the valuation from $136 to $158 per paper and confirming the recommendation "buy" (Buy). BNP Paribas raised its target price from $97 to $123 with a Neutral rating. Macquarie and RBC Capital maintained their Outperform ratings (Outperform, corresponding to a Buy recommendation on the stock) with target adjustments from $115 to $126 and from $120 to $125, respectively. The consensus forecast on Newmont shares is "above market", the average target price of $139.02 per share implies 11% upside potential.

Gold has risen by 71% over the past 12 months. On February 20, quotes of the precious metal fluctuate around $5000 per ounce, while traders assess new geopolitical risks, according to Trading Economics. Tensions between the U.S. and Iran have escalated after U.S. President Donald Trump set a 10-15 day deadline for negotiations with Tehran on the nuclear deal, and the military presence of U.S. forces in the Middle East has become the largest since the U.S. invasion of Iraq in 2003.

This article was AI-translated and verified by a human editor