Back to top

Image: Bigstock

NEM's Debt Paydown Powers Balance Sheet Strength - Can It Continue?

Read MoreHide Full Article

Key Takeaways

  • Newmont cut net debt to $1.4B in Q2, from $3.2B in the prior quarter.
  • Strong free cash flow of $1.7B, up 42% sequentially, powered the deleveraging.
  • NEM shares are up 85.4% YTD, outpacing the gold mining industry's 68% rise.

Newmont Corporation (NEM - Free Report) continues to take steps to improve its leverage profile. It retired $372 million of debt during the second quarter. NEM ended the second quarter with net debt of $1,422 million, down from $3,221 million at the end of the prior quarter. Notably, Newmont has reduced debt by $1.4 billion since the beginning of 2025.

The deleveraging was backed by strong free cash flow generation. NEM’s 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 is balancing deleveraging with post-Newcrest acquisition integration and asset streamlining through strategic non-core divestments. As gold prices remain supportive and strong cash flow generation continues, the company is expected to maintain this sharp pace of deleveraging moving ahead.

Looking across the peer landscape, Kinross Gold Corporation (KGC - Free Report) has also taken steps to improve its leverage profile, thanks to strong free cash flow generation. Kinross improved its net debt position to around $100 million at the end of the second quarter from $540 million in the prior quarter. Notably, Kinross’ second-quarter free cash flow surged roughly 87% year over year and 74% from the preceding quarter. 

Agnico Eagle Mines Limited (AEM - Free Report) remains focused on paying down debt using excess cash, with long-term debt reducing by $550 million sequentially to $595 million at the end of the second quarter.  Agnico Eagle ended the quarter with a significant net cash position of $963 million, driven by the increase in cash position and reduction of debt. Agnico Eagle has a robust liquidity position and generates substantial cash flows, which allow it to fund a strong pipeline of growth projects, pay down debt and drive shareholder value.

The Zacks Rundown for NEM

Shares of Newmont have shot up 85.4% year to date against the Zacks Mining – Gold industry’s rise of 68%, largely driven by the gold price rally.

Zacks Investment Research Image Source: Zacks Investment Research

From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 13.12, a roughly 0.6% discount to the industry average of 13.20X. It carries a Value Score of B.

Zacks Investment Research Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NEM’s 2025 earnings implies a year-over-year rise of 51.4%. The EPS estimates for 2025 have been trending higher over the past 60 days.

Zacks Investment Research Image Source: Zacks Investment Research

NEM stock currently carries a Zacks Rank #3 (Hold). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Newmont Corporation (NEM) - free report >>

Kinross Gold Corporation (KGC) - free report >>

Agnico Eagle Mines Limited (AEM) - free report >>

Published in