Should You Buy Newmont Stock Ahead of Q3 Earnings Report?

Core Insights - Newmont Corporation (NEM) is expected to report third-quarter 2025 results on October 23, with anticipated benefits from higher gold prices despite cost challenges [1][6] - The Zacks Consensus Estimate for earnings is $1.27 per share, reflecting a 56.8% year-over-year increase, while revenues are projected at $4.97 billion, indicating an 8% rise from the previous year [2] Earnings Performance - NEM has outperformed the Zacks Consensus Estimate for earnings in three of the last four quarters, with an average earnings surprise of 32.8% [3] - The company has an Earnings ESP of +1.32% and holds a Zacks Rank 1 (Strong Buy), suggesting a high likelihood of an earnings beat this quarter [4][5] Factors Influencing Q3 Results - Higher gold prices are expected to positively impact NEM's top line and margins, with average realized prices estimated at $3,357 per ounce, a 33.3% year-over-year increase [6][9] - The company's strategic focus on Tier 1 assets is anticipated to support growth, despite rising production costs [10] Market Conditions - Gold prices have surged approximately 17% in the third quarter and about 65% year-to-date, driven by factors such as geopolitical tensions, a weak dollar, and increased central bank purchases [8] - The Federal Reserve's interest rate cuts have further fueled the rally in gold prices [8] Cost Considerations - NEM is facing higher unit costs, with costs applicable to sales and all-in-sustaining costs (AISC) rising around 6% and 2% year-over-year, respectively [11] - Sustaining capital spending is expected to increase significantly in the third quarter due to planned investments [11] Stock Performance and Valuation - NEM's shares have increased by 61.8% over the past year, underperforming the Zacks Mining – Gold industry's 70.1% rise but outperforming the S&P 500's 16.3% increase [12] - The company is trading at a forward 12-month earnings multiple of 15.29, slightly below the peer group average of 15.49 [15] Investment Thesis - Newmont is positioned for growth with a strong project portfolio that is expected to enhance production capacity and extend mine life [19] - The acquisition of Newcrest Mining Limited is anticipated to create significant shareholder value and synergies [19] - NEM's robust liquidity and cash flow generation capabilities support its growth initiatives and shareholder value [20] Conclusion - Investing in NEM stock ahead of its earnings announcement is seen as a compelling opportunity due to its strong market position, financial health, and favorable growth outlook [21]