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Is Newmont Stock Still a Buy After a 36% Rally in 3 Months?
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Key Takeaways
{\"0\":\"Newmont\'s shares jumped 35.6% in three months, beating industry and S&P 500 gains.\",\"1\":\"Gold\'s record rally and forecast-topping earnings have powered NEM\'s performance.\",\"2\":\"Higher production costs remain a challenge despite strong cash flows and projects.\"}
Newmont Corporation’s (NEM - Free Report) shares have popped 35.6% in the past three months, courtesy of the upswing in gold prices to historic highs and its forecast-topping earnings performance, aided by its operational efficiency and the strength of its Tier 1 portfolio.
NEM stock has outperformed the Zacks Mining – Gold industry’s 29% rise and the S&P 500’s increase of 11.4%. Among its gold mining peers, Barrick Mining Corporation (B - Free Report) , Agnico Eagle Mines Limited (AEM - Free Report) and Kinross Gold Corporation (KGC - Free Report) have rallied 36%, 24.1% and 49%, respectively, over the same period.
NEM’s 3-month Price Performance
Image Source: Zacks Investment Research
Technical indicators for NEM show bullish momentum. NEM eclipsed its 50-day simple moving average (SMA) on May 19, 2025. The NEM stock is also currently trading above its 200-day SMA, suggesting a long-term uptrend. The 50-day SMA is also reading higher than the 200-day SMA, following a golden crossover on April 16, 2025, indicating a bullish trend.
NEM Stock Trades Above 50-Day SMA
Image Source: Zacks Investment Research
Is the time right to buy NEM’s shares for potential upside? Let’s take a look at the stock’s fundamentals.
Key Projects & Asset Streamlining to Drive NEM’s Growth
Newmont continues to invest in growth projects in a calculated manner. The company is pursuing several projects, including the Ahafo North expansion in Ghana and the Cadia Panel Caves and Tanami Expansion 2 in Australia. These projects should expand production capacity and extend mine life, driving revenues and profits.
The acquisition of Newcrest Mining Limited has also created an industry-leading portfolio with a multi-decade gold and copper production profile in the most favorable mining jurisdictions globally. The combination of Newmont and Newcrest is expected to deliver significant value for its shareholders and generate meaningful synergies. NEM has achieved $500 million in annual run-rate synergies, following the Newcrest buyout.
Newmont has also divested non-core businesses as it shifts its strategic focus to Tier 1 assets. NEM completed its non-core divestiture program in April 2025 with the sale of its Akyem operation in Ghana and its Porcupine operation in Canada. NEM has executed agreements to sell its shares in Greatland Resources Limited and Discovery Silver Corp, for total cash proceeds of around $470 million after taxes and commissions. Following the sale of these shares, the company anticipates generating $3 billion in after-tax cash proceeds from its 2025 divestiture program. These funds will support Newmont’s capital allocation strategy, which focuses on reinforcing its balance sheet and delivering returns to its shareholders.
Robust Financial Health Supports NEM’s Capital Allocation
Newmont has a strong liquidity position and generates substantial cash flows, which allow it to fund its growth projects, meet short-term debt obligations and drive shareholder value. At the end of the second quarter of 2025, Newmont had robust liquidity of $10.2 billion, including cash and cash equivalents of around $6.2 billion. Its free cash flow surged nearly threefold year over year and 42% from the prior quarter to $1.7 billion, led by an increase in net cash from operating activities and lower capital investment. Net cash from operating activities shot up 17% from the prior quarter to $2.4 billion. NEM delivered roughly $2 billion to its shareholders through dividends and share repurchases and reduced debt by $1.4 billion since the beginning of 2025. Newmont’s board has also authorized an additional $3 billion share repurchase program.
Newmont stands to benefit from the strength in gold prices, which should drive its profitability and cash flow generation. Gold prices have seen record-setting rally this year, mainly attributable to aggressive trade policies, including sweeping new import tariffs announced by President Donald Trump that have intensified global trade tensions and heightened investor anxiety. Also, central banks worldwide have been accumulating gold reserves, led by risks arising from Trump’s policies.
Prices of the yellow metal have surged 40% so far this year, with rising hopes of an interest rate cut by the Federal Reserve at the September policy meeting, a weak U.S dollar and tariff-related uncertainties triggering the rally lately, driving prices north of $3,600 per ton for the first time. Concerns over the labor markets have heightened the rate cut expectations. Increased purchases by central banks and geopolitical and trade tensions are factors expected to help the yellow metal sustain the upswing in gold prices.
NEM offers a dividend yield of 1.3% at the current stock price. Its payout ratio is 20% (a ratio below 60% is a good indicator that the dividend will be sustainable). Backed by strong cash flows and sound financial health, the company's dividend is perceived as safe and reliable.
Higher Costs Weigh on NEM Stock
Newmont is being challenged by higher production costs, which will likely weigh on its margins over the near term. Its second-quarter costs applicable to sales and all-in-sustaining costs (AISC) rose around 6% and 2% year over year, respectively. The company expects AISC from its core portfolio to be modestly higher than the full-year guidance in the third quarter due to an uptick in sustaining capital spending.
Moreover, Newmont expects gold AISC for the total portfolio to be $1,630 per ounce in 2025, implying a rise from $1,516 per ounce in 2024, with AISC for the core portfolio forecast at $1,620 per ounce. In the third quarter, sustaining capital spending is expected to rise significantly from the second quarter due to an increase in planned investments.
Newmont’s earnings estimates for 2025 have been going up over the past 60 days. The Zacks Consensus Estimate for third-quarter 2025 has also been revised higher over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $5.30, suggesting year-over-year growth of 52.3%. Earnings are expected to register roughly 56.8% growth in the third quarter.
Image Source: Zacks Investment Research
A Look at Newmont Stock’s Valuation
Newmont is currently trading at a forward price/earnings of 14.88X, a roughly 4.6% discount when stacked up with the industry’s average of 15.59X. NEM is trading at a premium to Barrick and a discount to Agnico Eagle and Kinross Gold. Newmont, Barrick and Kinross Gold currently have a Value Score of B, each, while Agnico Eagle has a Value Score of D.
NEM’s P/E F12M Vs. Industry, B, AEM and KGC
Image Source: Zacks Investment Research
Final Thoughts: Hold Onto NEM Shares
Newmont presents an attractive investment case, backed by a robust portfolio of growth projects, the strong performance of its Tier 1 assets and solid financial health. The asset streamlining rooted in Newmont’s objective to concentrate capital on high-return, long-life assets also underpins its long-term sustainability. Other positives include rising earnings estimates and a healthy growth trajectory. Higher realized gold prices should also boost NEM’s profitability and drive cash flow generation. However, it remains hamstrung by higher production costs, which may weigh on its margins. Retaining this Zacks Rank #3 (Hold) stock will be prudent for investors who already own it.
Image: Bigstock
Is Newmont Stock Still a Buy After a 36% Rally in 3 Months?
Key Takeaways
Newmont Corporation’s (NEM - Free Report) shares have popped 35.6% in the past three months, courtesy of the upswing in gold prices to historic highs and its forecast-topping earnings performance, aided by its operational efficiency and the strength of its Tier 1 portfolio.
NEM stock has outperformed the Zacks Mining – Gold industry’s 29% rise and the S&P 500’s increase of 11.4%. Among its gold mining peers, Barrick Mining Corporation (B - Free Report) , Agnico Eagle Mines Limited (AEM - Free Report) and Kinross Gold Corporation (KGC - Free Report) have rallied 36%, 24.1% and 49%, respectively, over the same period.
NEM’s 3-month Price Performance
Technical indicators for NEM show bullish momentum. NEM eclipsed its 50-day simple moving average (SMA) on May 19, 2025. The NEM stock is also currently trading above its 200-day SMA, suggesting a long-term uptrend. The 50-day SMA is also reading higher than the 200-day SMA, following a golden crossover on April 16, 2025, indicating a bullish trend.
NEM Stock Trades Above 50-Day SMA
Is the time right to buy NEM’s shares for potential upside? Let’s take a look at the stock’s fundamentals.
Key Projects & Asset Streamlining to Drive NEM’s Growth
Newmont continues to invest in growth projects in a calculated manner. The company is pursuing several projects, including the Ahafo North expansion in Ghana and the Cadia Panel Caves and Tanami Expansion 2 in Australia. These projects should expand production capacity and extend mine life, driving revenues and profits.
The acquisition of Newcrest Mining Limited has also created an industry-leading portfolio with a multi-decade gold and copper production profile in the most favorable mining jurisdictions globally. The combination of Newmont and Newcrest is expected to deliver significant value for its shareholders and generate meaningful synergies. NEM has achieved $500 million in annual run-rate synergies, following the Newcrest buyout.
Newmont has also divested non-core businesses as it shifts its strategic focus to Tier 1 assets. NEM completed its non-core divestiture program in April 2025 with the sale of its Akyem operation in Ghana and its Porcupine operation in Canada. NEM has executed agreements to sell its shares in Greatland Resources Limited and Discovery Silver Corp, for total cash proceeds of around $470 million after taxes and commissions. Following the sale of these shares, the company anticipates generating $3 billion in after-tax cash proceeds from its 2025 divestiture program. These funds will support Newmont’s capital allocation strategy, which focuses on reinforcing its balance sheet and delivering returns to its shareholders.
Robust Financial Health Supports NEM’s Capital Allocation
Newmont has a strong liquidity position and generates substantial cash flows, which allow it to fund its growth projects, meet short-term debt obligations and drive shareholder value. At the end of the second quarter of 2025, Newmont had robust liquidity of $10.2 billion, including cash and cash equivalents of around $6.2 billion. Its free cash flow surged nearly threefold year over year and 42% from the prior quarter to $1.7 billion, led by an increase in net cash from operating activities and lower capital investment. Net cash from operating activities shot up 17% from the prior quarter to $2.4 billion. NEM delivered roughly $2 billion to its shareholders through dividends and share repurchases and reduced debt by $1.4 billion since the beginning of 2025. Newmont’s board has also authorized an additional $3 billion share repurchase program.
Newmont stands to benefit from the strength in gold prices, which should drive its profitability and cash flow generation. Gold prices have seen record-setting rally this year, mainly attributable to aggressive trade policies, including sweeping new import tariffs announced by President Donald Trump that have intensified global trade tensions and heightened investor anxiety. Also, central banks worldwide have been accumulating gold reserves, led by risks arising from Trump’s policies.
Prices of the yellow metal have surged 40% so far this year, with rising hopes of an interest rate cut by the Federal Reserve at the September policy meeting, a weak U.S dollar and tariff-related uncertainties triggering the rally lately, driving prices north of $3,600 per ton for the first time. Concerns over the labor markets have heightened the rate cut expectations. Increased purchases by central banks and geopolitical and trade tensions are factors expected to help the yellow metal sustain the upswing in gold prices.
NEM offers a dividend yield of 1.3% at the current stock price. Its payout ratio is 20% (a ratio below 60% is a good indicator that the dividend will be sustainable). Backed by strong cash flows and sound financial health, the company's dividend is perceived as safe and reliable.
Higher Costs Weigh on NEM Stock
Newmont is being challenged by higher production costs, which will likely weigh on its margins over the near term. Its second-quarter costs applicable to sales and all-in-sustaining costs (AISC) rose around 6% and 2% year over year, respectively. The company expects AISC from its core portfolio to be modestly higher than the full-year guidance in the third quarter due to an uptick in sustaining capital spending.
Moreover, Newmont expects gold AISC for the total portfolio to be $1,630 per ounce in 2025, implying a rise from $1,516 per ounce in 2024, with AISC for the core portfolio forecast at $1,620 per ounce. In the third quarter, sustaining capital spending is expected to rise significantly from the second quarter due to an increase in planned investments.
NEM’s Rising Earnings Estimates Reflect Positive Sentiment
Newmont’s earnings estimates for 2025 have been going up over the past 60 days. The Zacks Consensus Estimate for third-quarter 2025 has also been revised higher over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $5.30, suggesting year-over-year growth of 52.3%. Earnings are expected to register roughly 56.8% growth in the third quarter.
A Look at Newmont Stock’s Valuation
Newmont is currently trading at a forward price/earnings of 14.88X, a roughly 4.6% discount when stacked up with the industry’s average of 15.59X. NEM is trading at a premium to Barrick and a discount to Agnico Eagle and Kinross Gold. Newmont, Barrick and Kinross Gold currently have a Value Score of B, each, while Agnico Eagle has a Value Score of D.
NEM’s P/E F12M Vs. Industry, B, AEM and KGC
Final Thoughts: Hold Onto NEM Shares
Newmont presents an attractive investment case, backed by a robust portfolio of growth projects, the strong performance of its Tier 1 assets and solid financial health. The asset streamlining rooted in Newmont’s objective to concentrate capital on high-return, long-life assets also underpins its long-term sustainability. Other positives include rising earnings estimates and a healthy growth trajectory. Higher realized gold prices should also boost NEM’s profitability and drive cash flow generation. However, it remains hamstrung by higher production costs, which may weigh on its margins. Retaining this Zacks Rank #3 (Hold) stock will be prudent for investors who already own it.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.