Newmont Corporation NEM is slated to report first-quarter 2025 results after the closing bell on April 23. The mining giant is expected to have benefited from higher gold prices in the first quarter amid cost headwinds.

The Zacks Consensus Estimate for first-quarter earnings has been revised upward in the past 60 days. The consensus estimate for earnings is pegged at 84 cents per share, suggesting a 52.7% year-over-year rise. The Zacks Consensus Estimate for first-quarter revenues currently stands at $4.54 billion, indicating a roughly 13% increase from the year-ago quarter.

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NEM beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed once. It has a trailing four-quarter earnings surprise of 34.5% on average.

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Q1 Earnings Whispers for NEM Stock

Our proven model does not conclusively predict an earnings beat for NEM this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

NEM has an Earnings ESP of -4.55% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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

Factors Shaping NEM’s Q1 Results

The impact of higher gold prices is expected to reflect on Newmont’s results in the to-be-reported quarter. Higher realized gold prices are expected to have driven its top line and margins.

Gold prices are shooting up this year as worries over the global trade war have boosted safe-haven demand for bullion. Prices are hitting new highs driven by a surge in safe-haven demand amid the intense trade tussle, global economic uncertainties and a weaker U.S. dollar. Prices of the yellow metal climbed nearly 19% in the first quarter and are already up roughly 26% this year.

The strength in gold prices is expected to reflect on NEM’s profitability in the March quarter.  Our estimate for average realized prices of gold for NEM stands at $2,759 per ounce, which indicates a 32% year-over-year rise.

Newmont’s first-quarter performance is also likely to have been supported by continued strong performance from its managed Tier 1 portfolio. Our estimate for NEM’s consolidated attributable gold production is pegged at roughly 1.54 million ounces for the quarter.

Higher unit costs are likely to have impacted NEM’s performance in the quarter to be reported. NEM, on its fourth-quarter call, said that it expects notably higher costs in the first quarter compared to subsequent quarters, partly due to the inclusion of production from non-core assets and the timing of sustaining capital spend from both managed and non-managed operations. The company expects its all-in sustaining costs (AISC) to be the highest in the first quarter. Our estimate for AISC is $1,691 per ounce, suggesting a year-over-year rise of 17.5%.

Newmont Stock’s Price Performance and Valuation

Thanks to the rally in gold prices, Newmont’s shares have surged 47% in the past year, underperforming the Zacks Mining – Gold industry’s 58.3% increase but topping the S&P 500’s rise of 5.8%. Its gold mining peers, Barrick Gold Corporation GOLD, Agnico Eagle Mines Limited AEM and Kinross Gold Corporation KGC have rallied 22.8%, 95.2% and 128.7%, respectively, over the same period. 

NEM’s One-year Price Performance

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From a valuation standpoint, Newmont is currently trading at a forward 12-month earnings multiple of 14.14X, a roughly 16.1% discount to the peer group average of 16.85X.

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Investment Thesis for NEM Stock

Newmont is well-placed for growth with a robust portfolio of projects, which should expand production capacity and extend mine life, thereby driving revenues and profits. The acquisition of Newcrest Mining Limited has also created an industry-leading portfolio and is expected to deliver significant value for its shareholders and generate meaningful synergies. 

NEM 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. As a leading gold producer, Newmont stands to benefit significantly from skyrocketing gold prices, which should boost its profitability and drive cash flow generation.

Final Thoughts: Buy NEM Shares

Investment in NEM stock ahead of its earnings announcement presents a compelling opportunity due to its strong market position, solid financial health, a healthy growth trajectory, rising earnings estimates, favorable gold market conditions and strategic growth investments. With a positive earnings outlook, NEM looks poised to deliver attractive returns to investors, making it a prudent choice to bet on for those looking to capitalize on the record-setting upswing in gold prices.

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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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