The average target price of NEM is 70 and suggests 16% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 88.6. This translates into 47% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 55.0. This is equivalent to 9% downside potential in the worst case. 

Newmont Corporation engages in the production and exploration of gold. It also explores for copper, silver, zinc, and lead. The company has operations and/or assets in the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, and Ghana. As of December 31, 2021, it had proven and probable gold reserves of 92.8 million ounces and land position of 62,800 square kilometers. The company was founded in 1916 and is headquartered in Denver, Colorado.

Newmont Corporation

Basic Materials

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has been moderate and on par with its peers. On average, the company pays dividends quarterly, which may appeal to investors valuing a regular income stream. 

NEM reported revenue of USD 19 645mn in the last 12 months, up 5% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 91% from FY24 to USD 3.24. Market expects EPS to reach USD 3.09 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 15ppts and its growth accelerated by 9ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is mildly favourable.

The company has reported good EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 49.8% in the last 12 months, up from 2.7% in FY23. 

Historically, NEM has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 25.8%, a growth from -21.1% in FY23. 

Newmont Corporation reported a return on equity (RoE) of 16.8% in the last 12 months, up from -10.3% in FY23. The market consensus projects an RoE of -16.9% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to 9.1% in the last 12 months, an increase from -5.3% in FY23. The market analysts predict that RoA will be -8.6% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to 10.2%, below the peers. The consensus estimate for FY24 for RoCE is -6.9%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.1 in the past several years. This ratio implies a average shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

NEM boasts high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually very stable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, robust profitability, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to excessive margin volatility, poor working capital management.

In highly turbulent market conditions, NEM is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, NEM is not overly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will remain relatively stable. The stock's losses on its worst days (less than 1-5% of the time) will range from low to minimal. We would also like to highlight the minimal intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is fairly priced compared to similar stocks. In particular, the stock is reasonably priced on P/E, of fair value on EV/EBITDA, trading at neutral levels on P/FCF. 

Newmont Corporation

$ 58.75

5

Newmont Corporation

$ 58.75

5

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 58.75

About

About

Newmont Corporation

$ 58.75

5

Newmont Corporation

$ 58.75

5

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 58.75

About

About

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