Is Newmont Stock Still a Buy After a 26% Rally in 3 Months?

Core Insights - Newmont Corporation's shares have increased by 26.2% over the past three months, driven by record-high gold prices and strong earnings performance [1][7][26] - The company's stock performance has outpaced the Zacks Mining – Gold industry's 17.5% rise and the S&P 500's 6% increase [2][7] Stock Performance - NEM's stock has shown bullish momentum, trading above its 200-day and 50-day simple moving averages, indicating a long-term uptrend [5][6] - Compared to peers, Barrick Mining Corporation, Agnico Eagle Mines Limited, and Kinross Gold Corporation have seen gains of 46.7%, 12.9%, and 29.1%, respectively [2] Production and Divestitures - Newmont reported a 15% year-over-year decline in gold production for Q3 2025, reaching 1.42 million ounces, attributed to strategic divestments and reduced grades [21] - The company anticipates maintaining gold production for 2025 at approximately 5.9 million ounces, with Q4 production expected to be around 1.415 million ounces, reflecting a 25% year-over-year decline [22] Financial Health - Newmont has a strong liquidity position of $9.6 billion, including $5.6 billion in cash and cash equivalents, and a record free cash flow of $1.6 billion [14] - The company has returned over $5.7 billion to shareholders through dividends and share repurchases in the past two years, while also reducing debt by approximately $2 billion [15][20] Growth Projects - Newmont is investing in growth projects such as the Ahafo North expansion in Ghana and the Cadia Panel Caves in Australia, which are expected to enhance production capacity and extend mine life [10][11] - The Ahafo North project is projected to produce between 275,000 and 325,000 ounces of gold annually over a 13-year mine life, with an expected ramp-up to full capacity in 2026 [11] Earnings Estimates - Earnings estimates for Newmont have been revised upward, with the Zacks Consensus Estimate for 2025 earnings at $6.32, indicating an 81.6% year-over-year growth [23] - The company is trading at a forward price/earnings ratio of 15.42X, which is a premium to the industry average of 14.66X [25] Investment Outlook - Newmont presents an attractive investment case due to its robust growth projects, strong Tier 1 asset performance, and solid financial health [26] - Despite challenges from lower production and strategic divestments, the strength in gold prices is expected to enhance profitability and cash flow generation [16][26]