Is Newmont Stock a Smart Buy Before Q3 Earnings Release?

Core Viewpoint - Newmont Corporation is expected to report strong third-quarter 2024 results, driven by higher gold prices and increased production volumes [1][6][8]. Financial Performance - The Zacks Consensus Estimate for third-quarter 2024 earnings is 75 cents per share, reflecting a 108.3% year-over-year increase [2]. - Revenue estimates for the same quarter stand at $4.07 billion, indicating a 63.4% increase from the previous year [2]. - Newmont's attributable gold production is projected at 1.72 million ounces for the September quarter, suggesting a 7.3% sequential rise [6]. Market Conditions - Gold prices have reached record highs, with an average realized price for Newmont estimated at $2,476 per ounce, a sequential rise of 5.5% [8]. - The gold market has been buoyed by a 50-basis-point interest rate cut by the U.S. Federal Reserve and geopolitical tensions, leading to a 4% gain in gold prices for Q3 2024 and a 32% increase year-to-date [8]. Cost and Efficiency - Newmont is expected to benefit from lower unit costs due to higher production volumes, with expectations of declining unit costs in the third and fourth quarters [9]. Stock Performance and Valuation - Newmont's shares have increased by 39.2% year-to-date, underperforming the Zacks Mining – Gold industry's 43.1% rise but outperforming the S&P 500's 22.9% increase [10]. - The company is currently trading at a forward 12-month earnings multiple of 16.16X, slightly above the peer group average of 15.82X [12]. Strategic Positioning - Newmont's acquisition of Newcrest Mining Limited has created a leading portfolio expected to deliver significant value and synergies [14]. - The company maintains a strong liquidity position and generates substantial cash flows, enabling it to fund growth projects and enhance shareholder value [14]. Investment Outlook - Investing in Newmont stock ahead of its earnings announcement is seen as a compelling opportunity due to its strong market position, financial health, and favorable gold market conditions [15].