Newmont Surges 73% in 6 Months: Buy, Sell or Hold the Stock?

Core Insights - Newmont Corporation (NEM) shares have increased by 72.9% over the past six months, driven by record gold prices and strong earnings performance [1][7] - NEM's stock performance has underperformed the Zacks Mining – Gold industry's 74.6% rise but has outperformed the S&P 500's increase of 9.4% [2] Stock Performance - NEM's stock 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] Growth Projects and Asset Streamlining - Newmont is investing in growth projects such as the Ahafo North expansion in Ghana and the Cadia Panel Caves and Tanami Expansion 2 in Australia, aimed at expanding production capacity and extending mine life [9] - The company achieved commercial production at Ahafo North in October 2025, with expected annual production between 275,000 and 325,000 ounces of gold over an estimated mine life of 13 years [10] - Newmont completed its non-core divestiture program in April 2025, selling operations in Ghana and Canada for approximately $470 million [11] - The company anticipates generating $3 billion in after-tax cash proceeds from its 2025 divestiture program to support its capital allocation strategy [12] Financial Health - Newmont reported a strong liquidity position of $9.6 billion, including cash and cash equivalents of around $5.6 billion, at the end of Q3 2025 [13] - 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 [13] - Over the past two years, Newmont has distributed more than $5.7 billion to shareholders through dividends and share repurchases [14] Gold Price Dynamics - Gold prices have seen a record-setting rally, driven by global trade tensions and central bank accumulation of gold reserves [16] - Although gold prices have pulled back from their peak, they remain elevated, currently around $5,000 per ounce, supported by geopolitical tensions and macroeconomic uncertainty [18] Production Outlook - Newmont experienced a 15% year-over-year decline in gold production for Q3 2025, reaching 1.42 million ounces, marking the third consecutive quarter of production decline [20] - The company expects gold production for 2025 to be around 5.9 million ounces, with Q4 production anticipated to be in line with Q3 [21] Earnings Estimates - Newmont's earnings estimates for 2025 have increased, with the Zacks Consensus Estimate currently at $6.36, indicating year-over-year growth of 82.8% [22] Valuation - Newmont is trading at a forward price/earnings ratio of 15.15X, which is a 7.5% premium to the industry's average of 14.09X [25] Investment Strategy - Newmont is positioned for growth with strong performance from its Tier 1 assets and a robust project portfolio, although weaker production due to divestments may impact performance [26]