Is Newmont Undervalued?

Core Viewpoint - Newmont Corporation, the world's largest gold miner, has experienced a stock decline of 13% over the past month, despite a strong Q3 2024 performance with revenues increasing by 84% year-over-year to $4.6 billion due to rising gold prices and higher production volumes following the acquisition of Newcrest [1][2]. Financial Performance - In Q3 2024, gold production rose by nearly 30% year-over-year, with gold prices reaching $2,518 per ounce compared to $1,920 per ounce in Q3 2023 [2]. - Earnings per share were reported at $0.81, falling short of estimates due to elevated costs, with all-in-sustaining costs rising to $1,611 per ounce, a 13% increase from the previous year [2]. - Newmont reported a net income of $922 million, marking its highest quarterly profit in five years, and is on track to meet its full-year 2024 guidance of approximately 6.75 million ounces of attributable gold production [3]. Stock Performance - Newmont's stock has underperformed the broader market for the past three years, with returns of 7% in 2021, -21% in 2022, and -9% in 2023 [4]. - The current stock price is around $46 per share, which is considered undervalued, with a price estimate of $53, indicating a potential upside of nearly 15% [5][6]. Strategic Moves - The acquisition of Newcrest for $17.5 billion is expected to enhance Newmont's margins as Newcrest is recognized as a low-cost producer, and it will also increase Newmont's copper production, which is essential for the green energy sector [6].