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Newmont Corp NEM

Morningstar Rating
$31.13 +1.25 (4.18%)
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Company Report

Newmont Earnings: A Poor Result but the Company’s Strategy Remains Sound

Lower production and dividend guidance, along with increased capital expenditure, were the main takeaways from no-moat Newmont’s 2023 result, which was weaker than we expected. After its recent purchase of Newcrest, we think management has taken the opportunity to reset expectations across the business, including updating mine plans at a number of assets. The company is also targeting the sale of six smaller, higher-cost mines. We think the strategy of owning a portfolio of larger, longer-life, lower-cost mines is reasonable. At around USD 1,440 per ounce in 2023, Newmont’s all-in-sustaining costs remain elevated. Along with rising production from remaining assets across our five-year forecast period, the disposals are likely to help return unit costs to within the second quartile of the industry.

Price vs Fair Value

NEM is trading at a 40% discount.
Price
$29.87
Fair Value
$79.00
Uncertainty
Medium
1-Star Price
$98.90
5-Star Price
$32.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Newmont is the world’s largest gold miner, with copper and other byproducts providing some diversification, representing around 15% of forecast midcycle revenue from 2028.

Bears

Bigger is not always better in gold mining. Newmont's operations span five continents, increasing complexity and difficulty managing the assets.

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News

Trading Information

Previous Close Price
$29.88
Day Range
$30.6631.49
52-Week Range
$29.4252.76
Bid/Ask
$31.12 / $31.13
Market Cap
$35.95 Bil
Volume/Avg
4.5 Mil / 12.6 Mil

Key Statistics

Price/Earnings (Normalized)
19.52
Price/Sales
2.13
Dividend Yield (Trailing)
5.36%
Dividend Yield (Forward)
3.35%
Total Yield
5.36%

Company Profile

Newmont is the world's largest gold miner. It bought Goldcorp in 2019, combined its Nevada mines in a joint venture with competitor Barrick later that year, and also purchased competitor Newcrest in November 2023. Its portfolio includes 17 wholly or majority owned mines and interests in two joint ventures in the Americas, Africa, Australia and Papua New Guinea. The company is expected to produce roughly 6.9 million ounces of gold in 2024. However, after buying Newcrest, Newmont is likely to sell a number of its higher cost, smaller mines accounting for 20% of forecast sales in 2024. Newmont also produces material amounts of copper, silver, zinc, and lead as byproducts. It had about two decades of gold reserves along with significant byproduct reserves at end December 2023.
Sector
Basic Materials
Industry
Gold
Stock Style Box
Mid Core
Total Number of Employees
14,600

Competitors

Valuation

Metric
NEM
AEM
KGC
Price/Earnings (Normalized)
19.5222.9211.26
Price/Book Value
1.191.240.96
Price/Sales
2.133.551.39
Price/Cash Flow
7.698.564.00
Price/Earnings
NEM
AEM
KGC

Financial Strength

Metric
NEM
AEM
KGC
Quick Ratio
1.170.500.77
Current Ratio
2.121.992.70
Interest Coverage
−1.1232.416.69
Quick Ratio
NEM
AEM
KGC

Profitability

Metric
NEM
AEM
KGC
Return on Assets (Normalized)
3.17%3.66%4.83%
Return on Equity (Normalized)
6.21%5.43%8.48%
Return on Invested Capital (Normalized)
4.92%5.21%6.14%
Return on Assets
NEM
AEM
KGC
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Gold Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
ZIJMY
Zijin Mining Group Co Ltd ADRCmbsyjt$46.5 Bil
ZIJMF
Zijin Mining Group Co Ltd Class HKcwxq$46.5 Bil
GOLD
Barrick Gold CorpHmzp$25.2 Bil
AEM
Agnico Eagle Mines LtdLrts$23.9 Bil
FNV
Franco-Nevada CorpMgvf$20.2 Bil
WPM
Wheaton Precious Metals CorpCmptkly$18.1 Bil
GFI
Gold Fields Ltd ADRMmpdkt$11.2 Bil
GFIOF
Gold Fields LtdRmhnfs$11.2 Bil
KGC
Kinross Gold CorpBxqpm$5.9 Bil

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