Newmont stock snapshot and recent performance

Newmont (NEM) continues to attract attention from investors looking at large gold producers, with the stock last closing at $108.23 and delivering a total return of 1.72x over the past 3 years.

Over the past year, Newmont’s share price return has been mixed, with a gain of 6.93% year to date set against a 90 day share price decline of 16.75%. At the same time, the 1 year total shareholder return of 108.26% points to strong longer term momentum.

If you are looking beyond a single gold producer, this is a good moment to widen your search with a screener focused on 33 elite gold producer stocks

With Newmont trading at $108.23 and indicators such as an intrinsic discount of 26.57% and a 32% gap to analyst targets, the question is whether this reflects undervaluation or a market that has already priced in future growth.

Most Popular Narrative: 111% Overvalued

Newmont last closed at $108.23, while the most followed narrative on Simply Wall St, according to StjepanK, puts fair value at $51.36 using an 8% discount rate.

A $19 billion revenue with a 19% net margin results in net revenue of $3.61 billion ($19bn x 0.19). When divided by 1.12 billion shares outstanding (3.61/1.12), we get an EPS of $3.22.

Curious how an earnings profile built on higher gold prices, tighter Tier 1 portfolios and long dated capex plans leads to a fair value well below today’s price.

Result: Fair Value of $51.36 (OVERVALUED)

However, this narrative could be challenged if gold prices move sharply against expectations or if concentrated assets face additional operational or regulatory setbacks.

Another view on Newmont’s valuation

StjepanK’s narrative points to Newmont being 111% overvalued based on future earnings and a P/E framework. Our DCF model suggests something quite different, with the stock trading at a 26.6% discount to an estimated future cash flow value of $147.39. Which set of assumptions do you think better fits how this business actually converts projects into cash over time?

Next Steps

With mixed signals on valuation and sentiment, this is a good time to stress test the numbers yourself and decide how comfortable you feel with the trade off between risk and reward, starting by weighing up the 4 key rewards and 1 important warning sign

Looking for more investment ideas?

If you stop at Newmont, you risk missing other stocks that might fit your goals even better. Keep your research going with targeted screeners.

• Target potential mispricings by scanning for companies that combine quality fundamentals with attractive pricing using the 46 high quality undervalued stocks.
• Strengthen your income focus by checking out businesses offering robust yields and consistent payouts through the 10 dividend fortresses.
• Prioritise resilience by filtering for companies with solid finances and lower risk profiles via the 64 resilient stocks with low risk scores.

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.