Newmont Corporation’s NEM stock looks attractive from a valuation perspective. NEM is currently trading at a forward price/earnings of 14.75X, a roughly 12.1% discount when stacked up with the Zacks Mining – Gold industry’s average of 16.78X. It also has a Value Score of B. NEM is trading at a premium to Barrick Gold Corporation GOLD and a discount to Agnico Eagle Mines Limited AEM and Kinross Gold Corporation KGC. 

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Technical indicators for NEM show bullish momentum. NEM eclipsed its 50-day simple moving average (SMA) on April 9, 2025. The stock is also currently trading above its 200-day SMA.  The 50-day SMA is on an upward trajectory since early February 2025 and looks on course to break above the 200-day SMA, suggesting a bullish trend.

NEM Stock Trades Above 50-Day SMA

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Newmont’s cheap valuation should lure investors seeking value. But is the time right to buy NEM’s shares based on its attractive valuation? Let’s delve deeper.

NEM Well Poised on Project Execution & Newcrest Buyout

Newmont continues to invest in growth projects in a calculated manner. The company is pursuing several projects, including Tanami Expansion 2 in Australia, the Ahafo North expansion in Ghana and Cadia Panel Caves in Australia. These projects should expand production capacity and extend mine life, driving revenues and profits.

The acquisition of Newcrest Mining Limited has also created an industry-leading portfolio with a multi-decade gold and copper production profile in the most favorable mining jurisdictions globally. The combination of Newmont and Newcrest is expected to deliver significant value for its shareholders and generate meaningful synergies. NEM has achieved $500 million in annual run-rate synergies following the Newcrest buyout. 

Newmont also remains committed to divesting non-core businesses as it shifts its strategic focus to Tier 1 assets. NEM’s attributable gold production rose around 9% year over year in the fourth quarter on strong performance from its managed Tier 1 portfolio. The company, last month, completed the divestment of three non-core assets — the Musselwhite and Eleonore operations in Canada and the Cripple Creek & Victor ("CC&V") operation in Colorado. The sale of these three additional non-core assets resulted in total after-tax cash proceeds of $1.7 billion before closing adjustments. Furthermore, NEM said yesterday that it has completed its non-core divestiture program with the sale of its Akyem operation in Ghana and its Porcupine operation in Canada, generating total after-tax cash proceeds of roughly $850 million before closing adjustments. Total gross proceeds from disclosed divestitures are expected to reach $4.3 billion, including $3.8 billion from non-core divestitures and $527 million from the sale of other investments. 

Sound Financial Health Supports NEM’s Capital Allocation 

Newmont has a strong liquidity position and generates substantial cash flows, which allows it to fund its growth projects, meet short-term debt obligations, and drive shareholder value. At the end of 2024, Newmont had liquidity of $7.7 billion, including cash and cash equivalents of around $3.6 billion. It generated a strong operating cash flow from continuing operations of $6.3 billion in 2024, climbing from around $2.8 billion in 2023. Its operating cash flow soared fourfold year over year to around $2.5 billion in the fourth quarter of 2024. Free cash flow for 2024 was $2.9 billion, including a record $1.6 billion in the fourth quarter. NEM also delivered $1.1 billion to its shareholders through dividends and repurchased shares worth $1.2 billion under its $3 billion total share repurchase program in 2024.

Newmont stands to benefit from the strength in gold prices, which should drive its profitability and cash flow generation. Gold prices rallied roughly 27% last year, driven by strong demand from central banks, monetary easing in the United States, global uncertainties, and a surge in safe-haven demand thanks to increased tensions in the Middle East and Russia. Gold prices are shooting up this year as worries over the global trade war have boosted safe-haven demand for bullion. 

Prices hit a record high of $3,357 per ounce yesterday, driven by a surge in safe-haven demand amid the intense U.S.-China trade tussle as well as a weaker U.S. dollar. Prices of the yellow metal are already up roughly 27% this year. Gold prices are likely to continue to gain support in an uncertain environment triggered by the tariff war. Increased purchases by central banks, led by risks from Trump’s policies, hopes of interest rate cuts and geopolitical tensions are other factors expected to help the yellow metal sustain the rally. 
    
NEM offers a dividend yield of 1.8% at the current stock price. Its payout ratio is 29% (a ratio below 60% is a good indicator that the dividend will be sustainable). Backed by strong cash flows and sound financial health, the company's dividend is perceived as safe and reliable. 

NEM’s Earnings Estimates Northbound 

Newmont’s earnings estimates for 2025 have been going up over the past 60 days. The Zacks Consensus Estimate for first-quarter 2025 has also been revised higher over the same time frame. 

The Zacks Consensus Estimate for 2025 earnings is currently pegged at $3.83, reflecting an expected year-over-year growth of 10.1%. Earnings are expected to register a roughly 52.7% growth in the first quarter. 

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

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Newmont Stock Outperforms S&P 500

Thanks to the rally in gold prices, NEM’s shares have racked up a gain of 45.1% over the past year, underperforming the industry’s 52.4% increase but topping the S&P 500’s rise of 8.1%. Among its gold mining peers, Barrick Gold, Agnico Eagle and Kinross Gold have rallied 21.6%, 93.1% and 130.9%, respectively, over the same period. 

Barrick Gold’s rally has been supported by its strong financial performance, efforts to expand production and the progress of key growth projects, including Lumwana Super Pit and Reko Diq. Agnico Eagle’s shares have performed remarkably on the bourses, thanks to its forecast-topping earnings performance, higher realized prices and strong production. Kinross Gold’s impressive performance has been driven by its strong operational execution, advancement of growth strategy and consistent strong performance of Tasiast and Paracatu, its two biggest assets.

NEM’s One-year Price Performance   

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How Should Investors Play the NEM Stock?

NEM’s robust portfolio of growth projects, strong performance of its Tier 1 assets and solid financial health bode well. Other positives include rising earnings estimates and a healthy growth trajectory. Skyrocketing gold prices should also boost NEM’s profitability and drive cash flow generation. With a positive earnings outlook, Newmont looks poised to deliver attractive returns to investors, making this Zacks Rank #2 (Buy) stock a prudent choice to bet on for those looking to capitalize on favorable gold market conditions. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Newmont Corporation (NEM) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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