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Newmont Gains 22% in 3 Months: How Should Investors Play the Stock?
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Key Takeaways
NEM stock jumped 22% in 3 months, beating the industry as gold prices rallied on global uncertainty.
Newmont's Newcrest buyout and project pipeline aim to boost output, margins, and shareholder value.
NEM generated a record $1.2B in free cash flow in Q1, highlighting solid financial strength.
Newmont Corporation’s (NEM - Free Report) shares have rallied 22% over the past three months, thanks to a rally in gold prices resulting from trade tensions and geopolitical uncertainties, which were flared up by the chaos in the Middle East due to escalating Israel-Iran tensions.
NEM stock has outperformed the Zacks Mining – Gold industry’s 17% rise and has also topped the S&P 500’s increase of 5.7%. 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 gained 9.6%, 16.4% and 26%, 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
Let’s take a look at NEM’s fundamentals to better analyze how to play the stock.
NEM Well Poised on Project Execution & Newcrest Buyout
Newmont continues to invest in growth projects in a calculated manner. The company is pursuing several projects, including Tanami Expansion 2 in Australia, the Ahafo North expansion in Ghana and Cadia Panel Caves 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. In March 2025, the company completed the divestment of three non-core assets — the Musselwhite and Eleonore operations in Canada and the Cripple Creek & Victor (CC&V) operation in Colorado. The sale of these three additional non-core assets resulted in total after-tax cash proceeds of $1.7 billion before closing adjustments. Furthermore, NEM completed its non-core divestiture program in April with the sale of its Akyem operation in Ghana and its Porcupine operation in Canada, generating total after-tax cash proceeds of roughly $850 million before closing adjustments. Total gross proceeds from disclosed divestitures are expected to reach $4.3 billion, including $3.8 billion from non-core divestitures and $527 million from the sale of other investments.
Sound 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 first quarter of 2025, Newmont had liquidity of $8.8 billion, including cash and cash equivalents of around $4.7 billion. Its operating cash flow from continuing operations soared roughly 162% year over year to around $2 billion in the first quarter. NEM also generated a record free cash flow of $1.2 billion in the quarter. NEM delivered $1 billion to its shareholders through dividends and share repurchases and reduced debt by $1 billion since the beginning of 2025.
Newmont stands to benefit from the strength in gold prices, which should drive its profitability and cash flow generation. Gold prices have rallied roughly 29% this year, largely 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 catapulted to a record high of $3,500 per ounce on April 22. While gold prices have fallen from their April 2025 highs, they remain favorable. The yellow metal is gaining from safe-haven demand triggered by trade and geopolitical uncertainties, and is currently hovering near the $3,400 per ounce level. Increased purchases by central banks and geopolitical tensions worsened by the Israel-Iran conflict are factors expected to help the yellow metal sustain the rally.
NEM offers a dividend yield of 1.7% at the current stock price. Its payout ratio is 24% (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.
Newmont’s earnings estimates for 2025 have been going up over the past 60 days. The Zacks Consensus Estimate for second-quarter 2025 has also been revised higher over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $4.18, suggesting year-over-year growth of 20.1%. Earnings are expected to register roughly 31.9% growth in the second quarter.
Image Source: Zacks Investment Research
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
A Look at Newmont Stock’s Valuation
The NEM stock looks attractive from a valuation perspective. Newmont is currently trading at a forward price/earnings of 13.21X, a roughly 7% discount when stacked up with the industry’s average of 14.21X. NEM is trading at a premium to Barrick and a discount to Agnico Eagle and Kinross Gold. Newmont currently has a Value Score of B. Both Barrick and Kinross Gold have a Value Score of A, while Agnico Eagle has a Value Score of C.
NEM’s P/E F12M Vs. Industry, B, AEM and KGC
Image Source: Zacks Investment Research
What Should You Do With NEM Stock?
Newmont presents an attractive investment case backed by a robust portfolio of growth projects, strong performance of its Tier 1 assets and solid financial health. 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. With a positive earnings outlook, Newmont looks poised to deliver attractive returns to its investors, making this Zacks Rank #2 (Buy) stock a prudent choice to bet on for those looking to capitalize on still-favorable gold market conditions.
Image: Bigstock
Newmont Gains 22% in 3 Months: How Should Investors Play the Stock?
Key Takeaways
Newmont Corporation’s (NEM - Free Report) shares have rallied 22% over the past three months, thanks to a rally in gold prices resulting from trade tensions and geopolitical uncertainties, which were flared up by the chaos in the Middle East due to escalating Israel-Iran tensions.
NEM stock has outperformed the Zacks Mining – Gold industry’s 17% rise and has also topped the S&P 500’s increase of 5.7%. 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 gained 9.6%, 16.4% and 26%, 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
Let’s take a look at NEM’s fundamentals to better analyze how to play the stock.
NEM Well Poised on Project Execution & Newcrest Buyout
Newmont continues to invest in growth projects in a calculated manner. The company is pursuing several projects, including Tanami Expansion 2 in Australia, the Ahafo North expansion in Ghana and Cadia Panel Caves 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. In March 2025, the company completed the divestment of three non-core assets — the Musselwhite and Eleonore operations in Canada and the Cripple Creek & Victor (CC&V) operation in Colorado. The sale of these three additional non-core assets resulted in total after-tax cash proceeds of $1.7 billion before closing adjustments. Furthermore, NEM completed its non-core divestiture program in April with the sale of its Akyem operation in Ghana and its Porcupine operation in Canada, generating total after-tax cash proceeds of roughly $850 million before closing adjustments. Total gross proceeds from disclosed divestitures are expected to reach $4.3 billion, including $3.8 billion from non-core divestitures and $527 million from the sale of other investments.
Sound 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 first quarter of 2025, Newmont had liquidity of $8.8 billion, including cash and cash equivalents of around $4.7 billion. Its operating cash flow from continuing operations soared roughly 162% year over year to around $2 billion in the first quarter. NEM also generated a record free cash flow of $1.2 billion in the quarter. NEM delivered $1 billion to its shareholders through dividends and share repurchases and reduced debt by $1 billion since the beginning of 2025.
Newmont stands to benefit from the strength in gold prices, which should drive its profitability and cash flow generation. Gold prices have rallied roughly 29% this year, largely 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 catapulted to a record high of $3,500 per ounce on April 22. While gold prices have fallen from their April 2025 highs, they remain favorable. The yellow metal is gaining from safe-haven demand triggered by trade and geopolitical uncertainties, and is currently hovering near the $3,400 per ounce level. Increased purchases by central banks and geopolitical tensions worsened by the Israel-Iran conflict are factors expected to help the yellow metal sustain the rally.
NEM offers a dividend yield of 1.7% at the current stock price. Its payout ratio is 24% (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.
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 second-quarter 2025 has also been revised higher over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $4.18, suggesting year-over-year growth of 20.1%. Earnings are expected to register roughly 31.9% growth in the second quarter.
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
A Look at Newmont Stock’s Valuation
The NEM stock looks attractive from a valuation perspective. Newmont is currently trading at a forward price/earnings of 13.21X, a roughly 7% discount when stacked up with the industry’s average of 14.21X. NEM is trading at a premium to Barrick and a discount to Agnico Eagle and Kinross Gold. Newmont currently has a Value Score of B. Both Barrick and Kinross Gold have a Value Score of A, while Agnico Eagle has a Value Score of C.
NEM’s P/E F12M Vs. Industry, B, AEM and KGC
What Should You Do With NEM Stock?
Newmont presents an attractive investment case backed by a robust portfolio of growth projects, strong performance of its Tier 1 assets and solid financial health. 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. With a positive earnings outlook, Newmont looks poised to deliver attractive returns to its investors, making this Zacks Rank #2 (Buy) stock a prudent choice to bet on for those looking to capitalize on still-favorable gold market conditions.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.