Newmont (NEM) Slips Before Earnings, Is It Still Cheap?

Newmont (NEM) recently slipped 2% in a single session to close near US$126, even as attention shifts to its upcoming earnings update with projected EPS of US$1.88 and revenue of US$5.92b.

That single session slip sits against a much stronger backdrop, with Newmont’s share price showing a 26.5% 90 day return and a 25.3% year to date gain, while its 1 year total shareholder return of 61.5% points to momentum that has been building rather than fading.

Compare Newmont's recent momentum with a curated group of peers by scanning the 35 elite gold producer stocks alongside this earnings focused story.

So is Newmont’s latest slip just sentiment cooling after a strong run, or does it hint at the market quietly reassessing what the business is really worth ahead of earnings?

Most Popular Narrative: 4.6% Undervalued

Newmont last closed at $126.81, against a widely followed fair value narrative of $132.87. This frames the recent pullback as a move within a tight valuation band rather than a sharp reset.

The realization of synergies and increased production scale following the Newcrest Mining acquisition, together with ongoing asset optimization and the ramp-up of expansion projects (such as Ahafo North and Tanami), should support long-term revenue growth and cash flow stability.

Read the complete narrative. Read the complete narrative.

Want to see what sits behind that fair value call for Newmont? The narrative focuses on compounding revenue, thicker margins, and a future earnings base that looks very different from today.

Result: Fair Value of $132.87 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

Still, Newmont faces real swing factors, including lower grade processing at key mines and higher sustaining and development spending that could pressure future cash generation.

Find out about the key risks to this Newmont narrative.

Another View On Newmont’s Valuation

The analyst narrative frames Newmont as about 4.6% undervalued against a $132.87 fair value, yet the SWS DCF model tells a slightly different story. On that future cash flow view, the shares at $126.81 sit just above an estimated value of $125.69, which points to a tight margin of safety. For an investor, the real question is which set of assumptions feels more realistic.

For a closer look at how that cash flow estimate is built, and what would need to change for the story to shift meaningfully, Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Newmont for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 31 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Sentiment around Newmont is clearly mixed, and that is exactly when it pays to move quickly, test the numbers yourself, and weigh both sides of the debate. To see the key tension between optimism and concern set out in one place, review the 4 key rewards and 1 important warning sign

Looking for more investment ideas beyond Newmont?

If you only stop at Newmont, you risk missing other opportunities that match your style, your risk tolerance, and the kind of outcomes you actually want.

• Target high potential opportunities by scanning the 21 elite penny stocks with strong financials, which combine small size with stronger financial footing than the typical speculative trade.
• Seek more compelling entry points by reviewing the 31 high quality undervalued stocks, which pair solid business quality with prices that lag their fundamentals.
• Focus on protecting your capital by using the 11 resilient stocks with low risk scores and filtering for businesses with more resilient balance sheets and steadier risk profiles.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com