Newmont Mining Surges After Exceeding Earnings Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy NEM?
Source: Fool
- Earnings Beat: Newmont Mining reported a 45.9% year-over-year revenue increase to $7.31 billion in Q1, with adjusted EPS soaring 132% to $2.90, significantly surpassing analyst expectations and demonstrating robust performance amid rising gold prices.
- Share Buyback Initiative: The company repurchased $2.4 billion in shares during the quarter and announced a new $6 billion buyback program, aimed at enhancing shareholder returns and reflecting management's confidence in the company's future prospects.
- Cost Reduction: Despite anticipating lower production this year due to weather and maintenance issues, Newmont achieved an all-in sustaining cost of $1,029 per ounce, well below the $4,900 per ounce realization price, showcasing effective cost management.
- Market Outlook Caution: Management warned that sustaining costs per ounce may rise due to the closure of the Strait of Hormuz, although Newmont trades at only 13 times this year's earnings, indicating market sensitivity to gold prices.
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Analyst Views on NEM
Wall Street analysts forecast NEM stock price to rise
14 Analyst Rating
11 Buy
3 Hold
0 Sell
Strong Buy
Current: 107.610
Low
89.00
Averages
110.85
High
125.00
Current: 107.610
Low
89.00
Averages
110.85
High
125.00
About NEM
Newmont Corporation is a gold company and a producer of copper, zinc, lead, and silver with operations and/or assets in the Africa, Australia, Latin America & Caribbean, North America, and Papua New Guinea regions. The Company's operations include Brucejack, Red Chris, Penasquito, Merian, Cerro Negro, Yanacocha, Boddington, Tanami, Cadia, Lihir, Ahafo, and NGM. The Brucejack operation includes four mining leases and six core mineral claims which cover 8,169 acres (3,306 hectares) and 337 mineral claims covering 298,795 acres (120,918 hectares). The Red Chris operation includes five mining leases which cover 12,703 acres and 199 mineral claims, encompassing an area of 164,903 acres (66,734 hectares). Penasquito includes 20 mining concessions for operations comprising 113,231 acres (45,823 hectares) and 60 mining concessions for exploration of 107,456 acres (43,486 hectares). The Merian operation includes one right of exploitation encompassing an area of 41,687 acres (16,870 hectares).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Share Buyback Initiative: The company repurchased $2.4 billion in shares during the quarter and announced a new $6 billion buyback program, aimed at enhancing shareholder returns and reflecting management's confidence in the company's future prospects.
- Cost Reduction: Despite anticipating lower production this year due to weather and maintenance issues, Newmont achieved an all-in sustaining cost of $1,029 per ounce, well below the $4,900 per ounce realization price, showcasing effective cost management.
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- Fed Policy Expectations: The market anticipates that the Federal Reserve will keep interest rates unchanged at the upcoming meeting, focusing on oil prices and inflation dynamics, reflecting a cautious outlook on the economic landscape.
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Retirement Announcement: The Chief Technical Officer of Newmont Corporation has announced their retirement, as detailed in a Form 8-K filing.
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- Positive Economic Data: The US consumer confidence index unexpectedly rose to 92.8, surpassing expectations of 89.0, indicating an increase in consumer confidence that could positively impact the stock market, although overall market pressures remain.
- Surging Oil Prices: WTI crude oil prices jumped over 3% to a two-week high amid escalating tensions between the US and Iran over the Strait of Hormuz, potentially deepening the global energy crisis and impacting inflation expectations and stock performance.
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- Share Buyback Initiative: The company repurchased $2.4 billion in shares during the quarter and announced a new $6 billion buyback program, aimed at enhancing shareholder returns and reflecting management's confidence in the company's future prospects.
- Cost Reduction: Despite anticipating lower production this year due to weather and maintenance issues, Newmont achieved an all-in sustaining cost of $1,029 per ounce, well below the $4,900 per ounce realization price, showcasing effective cost management.
- Market Outlook Caution: Management warned that sustaining costs per ounce may rise due to the closure of the Strait of Hormuz, although Newmont trades at only 13 times this year's earnings, indicating market sensitivity to gold prices.
See More
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- Accelerated Share Buybacks: Management ramped up share repurchases amid stock price declines due to the Iran war, having repurchased $2.4 billion in shares since the last earnings release, alongside a newly authorized $6 billion buyback program aimed at enhancing shareholder returns.
- Effective Cost Control: While sustaining costs are expected to rise due to increasing oil and gas prices, Newmont's all-in sustaining costs dropped to $1,029 per ounce, significantly lower than the average realization of $4,900 per ounce for gold sales, demonstrating effective cost management.
- Optimistic Market Outlook: Despite gold prices being 15% below historical highs, Newmont trades at only 13 times this year's earnings expectations, indicating market confidence in its future profitability, while its leadership in the global gold market continues to provide a competitive edge.
See More
