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

Core Viewpoint - 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]. Group 1: Stock Performance - NEM stock has outperformed the Zacks Mining – Gold industry's 17.5% rise and the S&P 500's increase of 6% [2]. - Among gold mining peers, Barrick Mining Corporation, Agnico Eagle Mines Limited, and Kinross Gold Corporation have gained 46.7%, 12.9%, and 29.1%, respectively, over the same period [2]. Group 2: Technical Indicators - NEM has been trading above its 200-day simple moving average (SMA) since April 9, 2025, indicating a long-term uptrend [5]. - The 50-day SMA is higher than the 200-day SMA, following a golden crossover on April 16, 2025, suggesting a bullish trend [5]. Group 3: Growth Projects and Divestitures - Newmont is investing in growth projects, including the Ahafo North expansion in Ghana and the Cadia Panel Caves and Tanami Expansion 2 in Australia, aimed at expanding production capacity [10]. - Ahafo North is expected to produce between 275,000 and 325,000 ounces of gold annually over an estimated mine life of 13 years, with production ramping up to full capacity in 2026 [11]. - The company completed its non-core divestiture program in April 2025, generating around $470 million from the sale of non-core assets [12]. - Newmont anticipates generating $3 billion in after-tax cash proceeds from its 2025 divestiture program to support its capital allocation strategy [13]. Group 4: Financial Health - Newmont has a strong liquidity position of $9.6 billion, including cash and cash equivalents of around $5.6 billion [14]. - Free cash flow more than doubled year over year to a record $1.6 billion, with net cash from operating activities increasing by 40% to $2.3 billion [14]. - The company has distributed over $5.7 billion to shareholders through dividends and share repurchases over the past two years [15]. Group 5: Gold Price Dynamics - Gold prices surged about 65% last year, currently trading above $4,600 per ounce, supported by central bank buying and expectations of rate cuts [18][19]. - Increased geopolitical tensions and macroeconomic uncertainty are expected to sustain favorable conditions for gold prices [19]. Group 6: Production Outlook - Newmont reported a 15% year-over-year and 4% sequential decline in gold production for Q3 2025, reaching 1.42 million ounces [21]. - The company expects fourth-quarter production of 1.415 million ounces, indicating a roughly 25% year-over-year decline [22]. Group 7: Earnings Estimates - Newmont's earnings estimates for 2025 have been revised higher, with the Zacks Consensus Estimate currently pegged at $6.32, suggesting year-over-year growth of 81.6% [23]. Group 8: Valuation - Newmont is currently trading at a forward price/earnings of 15.42X, a premium to the industry's average of 14.66X [25]. Group 9: Investment Recommendation - Newmont presents an attractive investment case backed by a robust portfolio of growth projects and solid financial health, despite challenges from lower production [26].