Newmont (NEM) shares have seen some movement lately, prompting investors to take a closer look at what is happening beneath the surface. With gold prices swinging and sector sentiment shifting, many are weighing Newmont’s current value as well as its future prospects.

Newmont's share price has climbed impressively over 2024, with a sharp 136.56% year-to-date gain and a robust 55.99% jump over the past three months. This suggests that investor momentum is building as gold’s outlook evolves. Even when accounting for dividends, the one-year total shareholder return stands at 60.69%, rewarding longer-term holders as well.

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Still, with share prices soaring and analysts setting only a modest upside from here, the key question is whether Newmont remains undervalued based on fundamentals or if the market has already priced in further growth.

Most Popular Narrative: 2.1% Overvalued

Newmont's fair value estimate from the prevailing narrative lands at $88.91, just below its last close of $90.77. This tight spread between market price and narrative fair value sets the stage for a close valuation debate.

"Elevated gold demand and successful integration of acquired assets are set to drive stable long-term growth and strong cash flow performance. Focus on operational efficiency and ESG initiatives boosts margins, protects against regulatory risks, and enhances access to capital and valuation."

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Result: Fair Value of $88.91 (OVERVALUED)

However, persistent operational hiccups or production shortfalls at major assets could quickly challenge the rosy outlook and prompt a reassessment of Newmont's valuation case.

Another View: DCF Model Tells a Different Story

Looking at Newmont through the lens of our DCF model, a less optimistic picture emerges. The SWS DCF model estimates a fair value of $78.85. This means shares are trading above what discounted future cash flows might justify. Could this suggest the recent momentum is running ahead of fundamentals?

Build Your Own Newmont Narrative

If you have a different perspective or want a hands-on approach to analyzing Newmont, you can easily craft your own narrative using the latest data in just minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Newmont.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.