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Should You Buy Newmont Stock After a 60% Rally in a Year?
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Key Takeaways
Newmont's shares have surged 59.8% in a year, fueled by forecast-topping earnings on higher prices.
NEM's growth projects will expand production capacity, extend mine life and support future earnings.
Lower 2026 production and higher unit costs could pressure Newmont's profitability.
Newmont Corporation's (NEM - Free Report) shares have shot up 59.8% over the past year, courtesy of its forecast-topping earnings performance, driven by operational efficiency, higher realized gold prices and the strength of its asset portfolio. The recent rebound in bullion prices has also contributed to the price appreciation.
NEM stock has outperformed the Zacks Mining – Gold industry’s 37.6% rise and the S&P 500’s 16.6% increase. 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 50.5%, 30.3% and 25.3%, respectively, over the same period.
NEM’s One-year Price Performance
Image Source: Zacks Investment Research
The NEM stock broke above its 50-day simple moving average (SMA) on Aug. 5, 2026, thanks to the rise in gold prices. It is also trading above its 200-day SMA, suggesting a long-term uptrend.
NEM Stock Trades Above 50-Day SMA
Image Source: Zacks Investment Research
Let’s take a look at NEM’s fundamentals to analyze the stock better.
Newmont Poised for Growth on Key Projects
Newmont continues to invest in growth projects in a calculated manner. The company is pursuing several projects, including the Cadia Panel Caves and Tanami Expansion 2 in Australia. These projects should expand Newmont’s production capacity and extend mine life, driving revenues and profits. NEM has recommenced work at the Cadia panel cave project following the seismic event in April. The Tanami expansion is progressing with an expected completion of all underground infrastructure by the end of the third quarter of 2026.
In October 2025, NEM achieved commercial production at Ahafo North, which followed the first gold pour in September 2025. Ahafo North is expected to produce between 275,000 and 325,000 ounces of gold annually over an estimated mine life of 13 years.
NEM has also received key regulatory approvals from the Province of British Columbia for its Red Chris Block Cave Project, marking a major milestone in the planned transformation of the Red Chris Mine from an open-pit operation to a large-scale block-cave mine. The approvals take the project closer to the final investment decision.
NEM’s Capital Allocation Backed by Solid Financial Health
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 second quarter of 2026, Newmont had robust liquidity of roughly $13 billion, including cash and cash equivalents of around $9 billion. Net cash provided by operating activities amounted to $2.9 billion, up roughly 23% from the year-ago quarter. Its free cash flow climbed 29% year over year to a record $2.2 billion, led by an increase in net cash from operating activities.
Newmont stands to benefit from higher gold prices, which should drive its profitability and cash flow generation. Its average realized price of gold jumped around 33% year over year in the second quarter, leading to a rise in its top line. Although gold prices have pulled back significantly from their January 2026 peak of nearly $5,600 per ounce, they remain favorable.
Bullion came under renewed pressure after hitting a more than three-month high near $4,650 per ounce in late August 2026. Prices fell to a more than three-week low near $4,300 an ounce earlier this month. A spike in oil prices intensified inflation concerns, while higher Treasury yields and a stronger dollar reduced gold's appeal. These, combined with increased expectations for a U.S. interest rate hike, weighed on gold. Gold prices again climbed to above $4,400 an ounce as the greenback and Treasury yields eased from recent highs. However, rising rate-hike expectations amid inflation fears from surging oil prices fueled by heightened U.S.-Iran tensions are again weighing on the yellow metal, with prices hovering above $4,300 an ounce lately, but still up nearly 19% year over year.
Meanwhile, Newmont distributed $3.4 billion to its shareholders through dividends and share repurchases in 2025. It has returned $1.9 billion to its shareholders since April 23, 2026. Newmont has executed buybacks under the current $6 billion authorized share repurchase program, with $4.3 billion remaining under it. NEM offers a dividend yield of 0.8% at the current stock price. Its payout ratio is 11%.
Newmont also remains committed to deleveraging, reducing debt by roughly $3.4 billion in 2025. It ended the second quarter with a strong net cash position of $3.4 billion and remains actively focused on managing its debt.
Lower Production, Higher Costs Ail Newmont
NEM saw lower gold production for the second quarter, partly linked to its strategic divestment of non-core assets. The company reported a roughly 13% year-over-year and 1% sequential decline in attributable gold production to 1.29 million ounces. Lower output from Cadia and reduced grades across certain mines impacted production. Newmont expects third-quarter 2026 production to be largely in line with the second-quarter level.
The company anticipates gold production at about 5.26 million ounces for 2026, indicating a year-over-year decline from 5.89 million ounces in 2025. NEM expects lower production from Penasquito and Cadia in 2026 due to site transitions. It also sees lower-than-expected production from Nevada Gold Mines and Pueblo Viejo. These will be partly offset by contributions from the newly commissioned Ahafo North mine.
Lower production is expected to lead to higher unit costs in 2026. NEM expects all-in-sustaining costs (AISC) — a critical cost metric for miners — to be $1,680 per ounce on a by-product basis, indicating a notable increase from $1,358 per ounce in 2025. The expected increase is due to lower sales volumes as a result of planned mine sequencing, higher royalties and production taxes, deferral of sustaining capital from 2025 into 2026 and inventory changes. Newmont also sees a sequential rise in unit costs in the third quarter, mainly due to increased sustaining capital spending and higher oil prices. The production decline and higher costs could undercut the profitability goals.
NEM’s Earnings Estimates Moving Lower
Newmont’s earnings estimates for 2026 have been going down over the past 60 days. The Zacks Consensus Estimate for third-quarter 2026 has also been revised lower over the same time frame.
Image Source: Zacks Investment Research
A Look at Newmont Stock’s Valuation
Newmont is currently trading at a forward price/earnings of 13.15X, a modest 2.7% discount to the industry average of 13.52X. NEM is trading at a premium to Barrick and Kinross Gold and at a discount to Agnico Eagle. Newmont and Barrick currently have a Value Score of B each. Kinross Gold and Agnico Eagle have a Value Score of A and C, respectively.
NEM’s P/E F12M Vs. Industry, B, AEM and KGC
Image Source: Zacks Investment Research
Final Thoughts: Hold Onto NEM Shares
Newmont is well-positioned for growth, backed by strong operating performance and a robust project pipeline that is expected to expand production capacity, extend mine life and support revenue and earnings growth. Higher year-over-year realized prices should continue to boost NEM’s profitability and drive cash flow generation. However, lower production stemming from divestitures and lower ore grades, along with elevated costs, could pressure overall performance. Moreover, declining earnings estimates add to the concerns surrounding the company’s outlook. Retaining this Zacks Rank #3 (Hold) stock will be prudent for investors who already own it.
View the Zacks #1 Rank List
Image: Bigstock
Should You Buy Newmont Stock After a 60% Rally in a Year?
Key Takeaways
Newmont Corporation's (NEM - Free Report) shares have shot up 59.8% over the past year, courtesy of its forecast-topping earnings performance, driven by operational efficiency, higher realized gold prices and the strength of its asset portfolio. The recent rebound in bullion prices has also contributed to the price appreciation.
NEM stock has outperformed the Zacks Mining – Gold industry’s 37.6% rise and the S&P 500’s 16.6% increase. 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 50.5%, 30.3% and 25.3%, respectively, over the same period.
NEM’s One-year Price Performance
The NEM stock broke above its 50-day simple moving average (SMA) on Aug. 5, 2026, thanks to the rise in gold prices. It is also trading above its 200-day SMA, suggesting a long-term uptrend.
NEM Stock Trades Above 50-Day SMA
Let’s take a look at NEM’s fundamentals to analyze the stock better.
Newmont Poised for Growth on Key Projects
Newmont continues to invest in growth projects in a calculated manner. The company is pursuing several projects, including the Cadia Panel Caves and Tanami Expansion 2 in Australia. These projects should expand Newmont’s production capacity and extend mine life, driving revenues and profits. NEM has recommenced work at the Cadia panel cave project following the seismic event in April. The Tanami expansion is progressing with an expected completion of all underground infrastructure by the end of the third quarter of 2026.
In October 2025, NEM achieved commercial production at Ahafo North, which followed the first gold pour in September 2025. Ahafo North is expected to produce between 275,000 and 325,000 ounces of gold annually over an estimated mine life of 13 years.
NEM has also received key regulatory approvals from the Province of British Columbia for its Red Chris Block Cave Project, marking a major milestone in the planned transformation of the Red Chris Mine from an open-pit operation to a large-scale block-cave mine. The approvals take the project closer to the final investment decision.
NEM’s Capital Allocation Backed by Solid Financial Health
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 second quarter of 2026, Newmont had robust liquidity of roughly $13 billion, including cash and cash equivalents of around $9 billion. Net cash provided by operating activities amounted to $2.9 billion, up roughly 23% from the year-ago quarter. Its free cash flow climbed 29% year over year to a record $2.2 billion, led by an increase in net cash from operating activities.
Newmont stands to benefit from higher gold prices, which should drive its profitability and cash flow generation. Its average realized price of gold jumped around 33% year over year in the second quarter, leading to a rise in its top line. Although gold prices have pulled back significantly from their January 2026 peak of nearly $5,600 per ounce, they remain favorable.
Bullion came under renewed pressure after hitting a more than three-month high near $4,650 per ounce in late August 2026. Prices fell to a more than three-week low near $4,300 an ounce earlier this month. A spike in oil prices intensified inflation concerns, while higher Treasury yields and a stronger dollar reduced gold's appeal. These, combined with increased expectations for a U.S. interest rate hike, weighed on gold. Gold prices again climbed to above $4,400 an ounce as the greenback and Treasury yields eased from recent highs. However, rising rate-hike expectations amid inflation fears from surging oil prices fueled by heightened U.S.-Iran tensions are again weighing on the yellow metal, with prices hovering above $4,300 an ounce lately, but still up nearly 19% year over year.
Meanwhile, Newmont distributed $3.4 billion to its shareholders through dividends and share repurchases in 2025. It has returned $1.9 billion to its shareholders since April 23, 2026. Newmont has executed buybacks under the current $6 billion authorized share repurchase program, with $4.3 billion remaining under it. NEM offers a dividend yield of 0.8% at the current stock price. Its payout ratio is 11%.
Newmont also remains committed to deleveraging, reducing debt by roughly $3.4 billion in 2025. It ended the second quarter with a strong net cash position of $3.4 billion and remains actively focused on managing its debt.
Lower Production, Higher Costs Ail Newmont
NEM saw lower gold production for the second quarter, partly linked to its strategic divestment of non-core assets. The company reported a roughly 13% year-over-year and 1% sequential decline in attributable gold production to 1.29 million ounces. Lower output from Cadia and reduced grades across certain mines impacted production. Newmont expects third-quarter 2026 production to be largely in line with the second-quarter level.
The company anticipates gold production at about 5.26 million ounces for 2026, indicating a year-over-year decline from 5.89 million ounces in 2025. NEM expects lower production from Penasquito and Cadia in 2026 due to site transitions. It also sees lower-than-expected production from Nevada Gold Mines and Pueblo Viejo. These will be partly offset by contributions from the newly commissioned Ahafo North mine.
Lower production is expected to lead to higher unit costs in 2026. NEM expects all-in-sustaining costs (AISC) — a critical cost metric for miners — to be $1,680 per ounce on a by-product basis, indicating a notable increase from $1,358 per ounce in 2025. The expected increase is due to lower sales volumes as a result of planned mine sequencing, higher royalties and production taxes, deferral of sustaining capital from 2025 into 2026 and inventory changes. Newmont also sees a sequential rise in unit costs in the third quarter, mainly due to increased sustaining capital spending and higher oil prices. The production decline and higher costs could undercut the profitability goals.
NEM’s Earnings Estimates Moving Lower
Newmont’s earnings estimates for 2026 have been going down over the past 60 days. The Zacks Consensus Estimate for third-quarter 2026 has also been revised lower over the same time frame.
A Look at Newmont Stock’s Valuation
Newmont is currently trading at a forward price/earnings of 13.15X, a modest 2.7% discount to the industry average of 13.52X. NEM is trading at a premium to Barrick and Kinross Gold and at a discount to Agnico Eagle. Newmont and Barrick currently have a Value Score of B each. Kinross Gold and Agnico Eagle have a Value Score of A and C, respectively.
NEM’s P/E F12M Vs. Industry, B, AEM and KGC
Final Thoughts: Hold Onto NEM Shares
Newmont is well-positioned for growth, backed by strong operating performance and a robust project pipeline that is expected to expand production capacity, extend mine life and support revenue and earnings growth. Higher year-over-year realized prices should continue to boost NEM’s profitability and drive cash flow generation. However, lower production stemming from divestitures and lower ore grades, along with elevated costs, could pressure overall performance. Moreover, declining earnings estimates add to the concerns surrounding the company’s outlook. Retaining this Zacks Rank #3 (Hold) stock will be prudent for investors who already own it.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.