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Newmont Mining (NEM)
NYSE:NEM
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Newmont Mining
(NYSE:NEM)
66Neutral
Positive Factors
Asset Divestiture
The sale of the Musselwhite mine exceeds its book value and aligns with Newmont's guidance for a mostly cash sale.
Free Cash Flow
Newmont Mining is expected to generate significantly higher free cash flow due to its higher gold volumes compared to its peer.
Valuation
Newmont Mining is trading at a significant discount compared to its peer, indicating potential for valuation appreciation as it meets its guidance.
Negative Factors
Earnings Estimates
Earnings estimates are updated lower for 2025 and 2026, despite the steady NAV.
Reclamation Liabilities
Reclamation liabilities at the Porcupine asset are key drivers to the discrepancy in valuation.
Valuation Discrepancy
The total proceeds of $425M from the Porcupine sale are $798M below the analyst's valuation of $1,228M for the asset.
Newmont Mining (NEM) vs. S&P 500 (SPY)
Market Cap
$54.48B
Dividend Yield2.07%
Average Volume (3M)11.51M
Price to Earnings (P/E)16.9
Beta (1Y)0.77
Revenue Growth58.27%
EPS GrowthN/A
CountryUS
Employees22,200
SectorBasic Materials
Sector Strength64
IndustryGold
Share Statistics
EPS (TTM)2.92
Shares Outstanding1,127,257,600
10 Day Avg. Volume11,301,402
30 Day Avg. Volume11,509,693
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.86
Price to Cash Flow (P/CF)5.30
P/FCF Ratio5.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$53.12Price Target Upside20.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Newmont Mining Business Overview & Revenue Model
Company DescriptionNewmont Mining Corporation, commonly referred to as Newmont, is a leading global gold mining company headquartered in Denver, Colorado. Founded in 1921, the company primarily operates in the mining and exploration of gold, copper, silver, zinc, and lead. Newmont is recognized for its extensive network of operations across North America, South America, Australia, and Africa, making it one of the largest gold producers in the world. The company is committed to sustainable and responsible mining practices, ensuring the safety and well-being of its employees and the environment.
How the Company Makes MoneyNewmont Mining Corporation generates revenue primarily through the extraction and sale of minerals, with gold being the predominant product. The company's revenue model is centered around mining operations, where it explores, develops, and operates gold mines, extracting gold ore which is then processed into bullion and sold in the global market. Additionally, Newmont produces and sells copper, silver, and other by-products, which contribute to its revenue streams. The company benefits from strategic partnerships and joint ventures to optimize production and share risks. Factors such as market gold prices, production costs, and operational efficiency significantly influence Newmont's earnings. The company also focuses on expanding its mineral reserves through exploration and acquisitions, ensuring long-term sustainability of its revenue model.
Newmont Mining Financial Statement Overview
Summary
Newmont Mining exhibits strong revenue growth and improved margins. However, concerns arise due to the absence of stockholders' equity in the TTM balance sheet, indicating potential underlying issues. Despite this, the cash flow position is robust, suggesting the company has sufficient liquidity to manage operations and investments.Income Statement
Newmont Mining's income statement shows a mixed performance. The gross profit margin for TTM is approximately 30.57%, indicating a decent level of profitability. However, the net profit margin of 15.19% reflects some improvement compared to previous years, driven by positive net income. Revenue growth is strong at 9.36% from the previous year, suggesting a positive trajectory. EBITDA and EBIT margins have improved significantly, demonstrating better operational efficiency.61
Positive
Balance Sheet
The balance sheet indicates potential concern with a zero stockholders' equity for TTM, impacting the calculation of key ratios. The previous annual report shows a debt-to-equity ratio of 0.33, which is relatively low, indicating a conservative capital structure. However, the negative equity in TTM signals potential financial distress or unusual accounting circumstances.50
Neutral
Cash Flow
Cash flow statements are robust, with a strong operating cash flow to net income ratio of 3.22 in TTM, indicating efficient cash generation relative to net income. Free cash flow growth is substantial, with the company generating significant free cash flow despite capital expenditures. This reflects a strong ability to generate cash to support growth and reduce debt.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 18.56B | 11.81B | 11.91B | 12.22B | 11.50B | Gross Profit |
| 6.42B | 3.00B | 3.26B | 4.46B | 4.18B | EBIT |
| 5.75B | 708.00M | 1.46B | 1.74B | 2.82B | EBITDA |
| 7.87B | 320.00M | 3.28B | 5.54B | 6.10B | Net Income Common Stockholders |
| 3.35B | -2.49B | -506.00M | 10.00M | 2.83B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.64B | 3.02B | 3.76B | 5.07B | 5.83B | Total Assets |
| 56.35B | 55.51B | 38.48B | 40.56B | 41.37B | Total Debt |
| 8.97B | 9.44B | 6.13B | 6.30B | 6.70B | Net Debt |
| 5.35B | 6.43B | 3.25B | 1.31B | 1.16B | Total Liabilities |
| 26.24B | 26.30B | 18.95B | 18.70B | 17.49B | Stockholders Equity |
| 30.11B | 29.03B | 19.35B | 22.02B | 23.01B |
| Cash Flow | Free Cash Flow | |||
| 6.36B | 97.00M | 1.09B | 2.63B | 3.58B | Operating Cash Flow |
| 6.36B | 2.76B | 3.22B | 4.28B | 4.88B | Investing Cash Flow |
| -2.70B | -1.00B | -2.98B | -1.87B | 91.00M | Financing Cash Flow |
| -2.95B | -1.60B | -2.36B | -2.96B | -1.68B |
Newmont Mining Technical Analysis
Negative
44.18
Price Trends
45.12
Negative
42.70
Positive
45.82
Negative
Market Momentum
1.15
Negative
63.64
Neutral
58.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEM, the sentiment is Negative. The current price of 44.18 is below the 20-day moving average (MA) of 46.79, below the 50-day MA of 45.12, and below the 200-day MA of 45.82, indicating a bearish trend. The MACD of 1.15 indicates Negative momentum. The RSI at 63.64 is Neutral, neither overbought nor oversold. The STOCH value of 58.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NEM.
Newmont Mining Risk Analysis
Newmont Mining disclosed 52 risk factors in its most recent earnings report. Newmont Mining reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Newmont Mining Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $21.98B | 16.89 | 14.66% | 0.96% | 23.38% | 131.87% | |
80 Outperform | $76.86B | 29.42 | 9.42% | 1.47% | 26.99% | -6.63% | |
73 Outperform | $47.05B | 16.28 | 9.00% | 2.09% | 15.40% | 72.49% | |
71 Outperform | $18.61B | 15.84 | 19.42% | 2.46% | 9.18% | ― | |
66 Neutral | $54.48B | 16.92 | 11.13% | 2.07% | 58.27% | ― | |
64 Neutral | $2.88B | ― | -8.06% | 0.76% | -29.09% | -157.10% | |
47 Neutral | $2.64B | -3.21 | -21.68% | 3.30% | 4.19% | -30.23% |
* Basic Materials Sector Average
Performance Comparison
NEM
Newmont Mining
44.18
5.42
13.98%
TSE:SSRM
SSR Mining
14.20
7.59
114.83%
TSE:K
Kinross Gold
17.86
9.26
107.70%
TSE:ABX
Barrick Gold
25.11
1.39
5.86%
TSE:AEM
Agnico Eagle
141.46
58.83
71.21%
AU
Anglogold Ashanti PLC
33.55
10.28
44.18%
Newmont Mining Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -7.59% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook for Newmont. While the company successfully completed its divestment program, achieved record free cash flow, and maintained strong capital returns, it also faces challenges with high all-in sustaining costs and operational hurdles at new acquisitions. These issues, combined with reduced earnings guidance, balance the positive achievements, leading to a neutral sentiment.Highlights
Record Free Cash Flow in Q4 2024
Newmont generated a record free cash flow of $1.6 billion in the fourth quarter of 2024, driven by strong gold prices, higher sales volumes, and positive working capital movements.
Successful Divestment Program
Newmont successfully sold or reached definitive agreements to sell all six of its non-core operations, potentially delivering up to $4.3 billion in pretax proceeds, with around $2.5 billion expected in cash proceeds in the first half of 2025.
Strong Capital Returns and Financial Position
In 2024, Newmont returned $2.3 billion to shareholders through dividends and share repurchases. The company maintained a strong balance sheet, ending the year with more than $3.6 billion in cash and $7.7 billion in liquidity.
Exceeding Production Guidance
Newmont exceeded its production guidance by delivering 6.8 million ounces of gold and over 150,000 tons of copper in 2024, with 85% produced from its core portfolio.
Lowlights
High All-In Sustaining Costs
For 2025, Newmont's all-in sustaining costs are expected to be around $1,620 per ounce, driven by higher sustaining capital investment and macroeconomic factors, including elevated costs at Cadia and increased taxes, royalties, and inflation.
Operational Challenges at New Acquisitions
Newmont faced challenges integrating new assets Cadia and Lihir, requiring robust operational and technical plans, with significant investments needed to bring them to Tier 1 levels.
Reduced Earnings Guidance Amid High Costs
Despite increased gold prices, Newmont's 2025 guidance suggests low margins with a production estimate of 5.6 million ounces of gold and an all-in sustaining cost of $1,620 per ounce, implying only an $80 margin per ounce.
Company Guidance
During Newmont's Fourth Quarter and Full Year 2024 Results Conference Call, CEO Tom Palmer provided detailed guidance, highlighting significant operational and financial metrics. The company exceeded its production guidance by delivering 6.8 million ounces of gold and over 150,000 tons of copper, generating $2.9 billion in free cash flow, including a record $1.6 billion in the fourth quarter. Newmont achieved $4.3 billion in pretax proceeds from its divestment program, expecting $2.5 billion in cash proceeds in early 2025, and removed approximately $1.8 billion in closure liabilities. The company returned $2.3 billion to shareholders through dividends and share repurchases, maintaining a strong balance sheet with more than $3.6 billion in cash and $7.7 million in liquidity. For 2025, Newmont projects gold production of around 5.6 million ounces at an all-in sustaining cost of $1,620 per ounce, with sustaining capital expected to be $1.8 billion and development capital at $1.3 billion. The strategic focus remains on safety, cost, and productivity improvements, alongside advancing key projects like Ahafo North and the Tanami expansion.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.