We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Newmont Corporation (NEM - Free Report) achieved a record first-quarter free cash flow of $1.2 billion, marking a significant turnaround from a negative $74 million in the same period a year ago. This substantial improvement came on the back of Newmont's enhanced operational efficiency and the strength of its Tier 1 portfolio. Strong free cash flow positions the company to strengthen its balance sheet and pursue strategic growth investments.
While the first-quarter performance set a high bar, sustainability remains a concern heading into the second quarter. Newmont has flagged several headwinds likely to impact second-quarter free cash flow. These include the impact of non-core asset divestitures, which reduce cash-generating capacity, and a spike in tax payments due to increased profitability in earlier quarters and taxes from divestments. Also, higher capital spending at Ahafo North and Cadia, alongside increased expenditures tied to the construction of water treatment facilities at Yanacocha, are expected to contribute to the decline.
The anticipated dip, however, appears to be a byproduct of long-term growth initiatives and portfolio optimization rather than deteriorating fundamentals. Newmont’s solid balance sheet allows it to fund its growth projects, meet debt obligations and drive shareholder value, notwithstanding the near-term cash flow pressure.
Among its major peers, Barrick Mining Corporation (B - Free Report) reported a free cash flow of $375 million for the first quarter, a nearly 12-fold year-over-year rise. The surge reflects Barrick’s higher operating cash flows driven by an uptick in realized gold and copper prices. Barrick reduced net debt by 5% during the quarter, leveraging healthy free cash flow generation.
Agnico Eagle Mines Limited (AEM - Free Report) also generated solid first-quarter free cash flows of $594 million, up around 50% year over year, backed by the strength in gold prices and operational results. This growth reflects Agnico Eagle's consistent operational execution and cost management. Agnico Eagle remains focused on paying down debt using excess cash flow, with net debt reducing by $212 million sequentially to just $5 million at the end of the first quarter.
The Zacks Rundown for NEM
Shares of Newmont have shot up 48.5% year to date against the Zacks Mining – Gold industry’s rise of 53.9%, largely driven by the gold price rally.
Image Source: Zacks Investment Research
From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 12.59, a roughly 10% discount to the industry average of 13.97X. It carries a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NEM’s 2025 and 2026 earnings implies a year-over-year rise of 20.1% and 11.7%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.
Image Source: Zacks Investment Research
NEM stock currently carries a Zacks Rank #1 (Strong Buy).
Image: Bigstock
Newmont's Record Free Cash Flow Sets the Pace: But Will It Last?
Key Takeaways
Newmont Corporation (NEM - Free Report) achieved a record first-quarter free cash flow of $1.2 billion, marking a significant turnaround from a negative $74 million in the same period a year ago. This substantial improvement came on the back of Newmont's enhanced operational efficiency and the strength of its Tier 1 portfolio. Strong free cash flow positions the company to strengthen its balance sheet and pursue strategic growth investments.
While the first-quarter performance set a high bar, sustainability remains a concern heading into the second quarter. Newmont has flagged several headwinds likely to impact second-quarter free cash flow. These include the impact of non-core asset divestitures, which reduce cash-generating capacity, and a spike in tax payments due to increased profitability in earlier quarters and taxes from divestments. Also, higher capital spending at Ahafo North and Cadia, alongside increased expenditures tied to the construction of water treatment facilities at Yanacocha, are expected to contribute to the decline.
The anticipated dip, however, appears to be a byproduct of long-term growth initiatives and portfolio optimization rather than deteriorating fundamentals. Newmont’s solid balance sheet allows it to fund its growth projects, meet debt obligations and drive shareholder value, notwithstanding the near-term cash flow pressure.
Among its major peers, Barrick Mining Corporation (B - Free Report) reported a free cash flow of $375 million for the first quarter, a nearly 12-fold year-over-year rise. The surge reflects Barrick’s higher operating cash flows driven by an uptick in realized gold and copper prices. Barrick reduced net debt by 5% during the quarter, leveraging healthy free cash flow generation.
Agnico Eagle Mines Limited (AEM - Free Report) also generated solid first-quarter free cash flows of $594 million, up around 50% year over year, backed by the strength in gold prices and operational results. This growth reflects Agnico Eagle's consistent operational execution and cost management. Agnico Eagle remains focused on paying down debt using excess cash flow, with net debt reducing by $212 million sequentially to just $5 million at the end of the first quarter.
The Zacks Rundown for NEM
Shares of Newmont have shot up 48.5% year to date against the Zacks Mining – Gold industry’s rise of 53.9%, largely driven by the gold price rally.
From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 12.59, a roughly 10% discount to the industry average of 13.97X. It carries a Value Score of B.
The Zacks Consensus Estimate for NEM’s 2025 and 2026 earnings implies a year-over-year rise of 20.1% and 11.7%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.
NEM stock currently carries a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.