Are you an investor looking to trade stocks of Newmont Corporation (NYSE: NEM), the world's largest gold miner? If you are, then there are several things you'll need to know about. As a global giant in the gold industry, the performance of Newmont stock, often referred to as Newmont stock or Newmont gold stock, has long been a point of discussion among investors worldwide. Of course, that's no surprise; after all, who wouldn't want to trade stocks of what is one of the biggest gold mining companies globally?
In this article, we'll look at everything you need to know about Newmont mining stock. This article aims to answer vital questions like "Should I buy Newmont stock?" and "Is Newmont stock undervalued?
We'll explore the recent performance of Newmont Corporation stock, including the latest Newmont stock forecast and stock price. We'll also provide insight that goes beyond the headlines of Newmont corporate news and help you determine whether this stock is the right buy for you or not. This article will also provide invaluable advice on how to trade Newmont stock using VSTAR, a cutting-edge CFD trading platform known for its fantastic benefits.
However, before we explore Newmont Corporation's stock performance, let's take a quick look at Newmont Corporation's overview.
Newmont Corporation's Overview
Newmont Corporation was founded nearly a century ago, in 1916, by William Boyce Thompson. Since its establishment, this American mining company has made tremendous progress and established itself as the world's largest gold mining company. Newmont Corporation is headquartered in Greenwood Village, Colorado. However, it also has a strong presence across five continents.
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Newmont has continued to build on its proud heritage. The company has marked several key milestones in its history, including acquiring Goldcorp in 2019, which solidified its position as the world's leading gold miner.
Regarding its current structure, Newmont Corporation is a multinational company with active gold mines in Nevada, Australia, Ghana, Peru, and Suriname. The company's leadership consists of a diverse and experienced team of executives with a wealth of expertise. The team, led by CEO Tom Palmer, continues to drive Newmont's commitment to safety, superior operational execution, sustainability, and profitable growth for all stakeholders.
Newmont Corporation's Business Model and Products/Services
Newmont Corporation has built its business model around being the world's largest gold producer, operating mines across the Americas, Australia, and Africa. Central to the company's strategy is the optimal extraction and production of gold and copper from its mines. This business approach has undoubtedly contributed to investors' constant interest in Newmont stock, Newmont gold stock, and Newmont mining stock.
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Investors frequently ask, "Should I buy Newmont stock?" To answer this, one must understand that Newmont's business model involves mining, production, exploration, and advanced-stage development. This multi-faceted approach feeds into the NEM stock forecast and the Newmont stock price.
Newmont Corporation's services are in two major parts. These include the following:
Mining and Exploration: This includes the mining of major products like copper, silver, zinc, molybdenum, and lead.
Refining and Treatment of the main products listed above.
In addition to the above, Newmont Corporation is at the exploratory stage of developing several gold reserves and acreage.
Newmont Corporation's Financials, Growth, and Valuation Metrics
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There was a notable change in the financial metrics of Newmont Corporation's earnings for the first quarter, which concluded on March 31, 2023.
The company reported sales for the quarter at USD 2,679 million, a decrease from the USD 3,023 million recorded during the same period in the prior year. Net income also experienced a similar trend, with the company reporting USD 351 million, compared to the USD 448 million reported a year earlier.
A detailed look at the company's revenue growth reveals the following:
● The figure for the first quarter ending March 31, 2023, stands at USD 2,679 million. This represents a decrease from the USD 3,200 million recorded for the quarter ending December 31, 2022, and also lower than the USD 3,058 million reported for the quarter ending June 30, 2022.
Newmont Corporation currently boasts a market capitalization of USD 33.12 billion. Interestingly, the company's P/E ratio is at -61.36, indicating that the market has negative expectations of its earnings. Lastly, the company's net profit margin stands at -4.55%, suggesting it has been operating at a loss in recent years.
The trend in sales, net income, and the negative P/E ratio and profit margin suggest potential challenges. However, such factors also provide an opportunity for improvement and growth in subsequent periods.
Is Newmont Corporation Stock Currently Undervalued?
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Based on evaluating several pieces of information, Newmont Corporation's stock (NEM) is currently undervalued.
When looking at the broader US Metals and Mining industry, NEM appears to be overvalued. Its higher P/S ratio of 2.9x indicates this, compared to the industry average of 1x. However, compared to its peer average, NEM appears to offer good value, given its Price-to-Sales Ratio (P/S Ratio) of 2.9x, significantly lower than the peer average of 5.3x. This suggests that NEM is undervalued in comparison to its peers.
Furthermore, when considering the fair value estimate ($54.79), NEM's current trading price of $41.99 is significantly below this, implying that the stock is undervalued by more than 20%.
So, while the stock appears to be overvalued compared to the US Metals and Mining industry average, the peer comparison and fair value estimation suggest that Newmont Corporation's stock is currently undervalued.
Newmont Corporation P/E Comparison
As of June 06, 2023, Newmont Corporation has a P/E ratio of 26.70. That's not all; Newmont gold stock currently holds a Zacks #1 ranking indicating a 'Strong Buy' recommendation. On the valuation front, the corporation has a Forward P/E ratio of 17.32. For context's sake, the average industry Forward P/E is 9.7. This indicates that Newmont stock commands a premium in the market relative to its industry peers.
In the next section, we'll explore Newmont Corp stock extensively. We'll also take a look at the possible Newmont stock forecast.
NEM Stock Performance
Before we go into an examination of Newmont stock performance, let's first take a quick look at Newmont gold stock trading information.
NEM Stock Trading Information
Newmont Corporation has the ticker symbol "NEM" and is listed on the New York Stock Exchange (NYSE). Newmont Corporation is a U.S.-based company, so its trading currency is the U.S. dollar. The standard trading hours for the NYSE are from 9:30 a.m. to 4:00 p.m. Eastern Time, Monday through Friday, excluding market holidays. Pre-market trading hours on the NYSE are from 4:00 a.m. to 9:30 a.m. Eastern Time. After-market trading hours extend from 4:00 p.m. to 8:00 p.m. Eastern Time.
NEM Stock splits
Newmont Corporation has undergone three stock splits since its founding. The first occurred on 1987-06-11, the second on 1987-10-09 with a 1.500 stock split ratio, and the last on 1994-04-22 with a 1.250 stock split ratio.
NEM Stock Dividends
Currently, Newmont Corporation currently pays a quarterly dividend of $0.40, which represents an annual dividend yield of 3.84%.
Latest Developments To Note
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Are you interested in trading Newmont gold stock? If you are, then here are some latest developments you should be aware of:
● Newcrest Acquisition: Newmont has agreed to acquire Newcrest through an Australian Scheme of Arrangement under which Newmont will acquire 100 percent of the issued shares in Newcrest Mining Limited. This deal will further strengthen Newmont's global gold mining leader position since it will open the Canadian market.
● Expanding Operations: Newmont plans to expand and improve the quality of its mining operations in Australia (Tanami Expansion 2) and Ghana with four additional open pit mines.
● Newmont Corporation plans to enhance its production and refining efficiency via the Yanacocha Sulfides project in South America. The undertaking is slated to introduce the first stage of sulfide deposits along with a complete processing circuit. Moreover, the inclusion of an autoclave will result in an output composition of 45% gold, 45% copper, and 10% silver.
Now let's proceed to the evaluation of Newmont gold stock performance analysis.
Overview of NEM Stock Price Performance: Driving Factors and Future Performance
Overview of NEM Stock Performance
NEM stock stands out with a price-to-sales ratio of 2.9x and a sales growth of 3.4%. In comparison, its major competitors, Royal Gold and Agnico Eagle Mines, have higher price-to-sales ratios of 12.8x and 4.2x, along with sales growth ratings of 2.4% and 1.4% respectively. This indicates that NEM stock offers good value, as its price-to-sales ratio (2.9x) is lower than the peer average (5.2x). However, when compared to the US Metals and Mining industry average (1x), NEM appears relatively expensive with its price-to-sales ratio (2.9x).
Driving Forces Behind NEM Stock Growth
One of the key driving forces behind Newmont Corporation's stock price is the company's strong earnings and revenue growth prospects. With an anticipated annual growth rate of 36.1% in earnings and 3.2% in revenue, these figures significantly contribute to investor confidence, potentially propelling the stock price upward.
Additionally, the forecasted EPS growth rate of 37.2% represents the potential for increased profitability, another significant driver for stock prices. Moreover, the projection for Newmont to become profitable over the next three years - outpacing the average savings rate of 2.1% - offers another catalyst for the stock's performance. A forecasted return on equity of 9.3% within three years further strengthens this outlook, suggesting the firm effectively utilizes shareholder funds to generate profits.
Future Performance
Newmont Corporation's prospects appear promising. The company expects to transition into profitability within three years, a growth rate surpassing the market average. This positions NEM as a high-growth earnings stock, making it potentially attractive for investors seeking robust earnings growth.
However, while earnings projections are favorable, it's important to note that NEM's projected revenue growth rate of 3.2% per year is forecasted to grow at a pace slower than that of the US market, which is 7.3% per year. This slower growth is a point of concern for investors looking for high-growth revenue stocks.
Overall, while the expected growth in profitability paints a bright picture for Newmont Corporation, its future prospects could be slightly weighed down by its comparably slower revenue growth. These factors should all be considered when forming an outlook on the future performance of NEM stock.
Analyst Rating and Price Target For NEM Stock
According to analyst forecasts, the median target price for the company over the next 12 months is $60.00. The analysts' estimates range from a high of $69.62 to a low of $42.68. This median estimate implies a significant increase of +42.52% compared to the previous price of $42.10.
Risks and Opportunities
Although the future looks pretty bright for Newmont, and the company's stock seems like a pretty good buy right now, you should know that the company does face several risks that could affect Newmont stock price. Some of these potential risks include the following:
Competitive Risks
Newmont operates in a highly competitive market, with companies like Kinross Gold Corporation (KGC) continuously striving to increase their market share, potentially impacting Newmont's profitability and growth.
Some other competitors that could directly or indirectly influence NEM stock price include:
Freeport-McMoran: This company is one of the world's largest publicly traded copper producers. The volatility of copper prices could lead Freeport-McMoran to shift its focus towardgold production, thus increasing competition for Newmont.
Barrick Gold Corporation: As one of the largest gold mining companies globally, Barrick Gold is a direct competitor. They have extensive resources and a substantial presence in many of the same regions as Newmont. A surge in Barrick's production or innovation that lowersits production costs could pose a threat to Newmont.
Cloud Peak Energy: While Cloud Peak Energy isn't a direct competitor as it focuses on coal production, shifts in the energy market could potentially lead it to diversify into metals like gold. If they were to make such a move, it could increase the level of competition in the industry.
That said, Newmont does have several competitive advantages over its competitors. These include the company's size, diverse asset base, and strong operational efficiency. These are key factors that place it ahead of its competitors.
Moreover, Newmont's commitment to sustainable and responsible mining practices not only reduces environmental and social risks, but also enhances its corporate reputation, which can be a competitive advantage in attracting and retaining investors.
However, maintaining these competitive advantages requires continuous innovation, operational excellence, and prudent financial management, particularly in an industry marked by fluctuating commodity prices and changing regulatory environments.
Some other risks that could affect Newmont Corp stock price include:
● Operational costs
● Geopolitics
● Changes in tax/mining policies
● Labor shortages
Opportunities For Growth and Expansion
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There are several opportunities for growth and expansion that Newmont Corporation can explore. Some of these include the following:
Expansion into new geographical regions: While Newmont already has a significant global presence, there are still untapped markets or regions with rich mineral resources that the company could explore.
Technological advancements: The mining industry is increasingly incorporating technology to improve efficiency and reduce environmental impact. Investing in automation and artificial intelligence technologies could enhance operational efficiency, reduce costs, and increase Newmont's competitiveness.
Diversification of product portfolio: Gold remains Newmont's primary product. However, expanding into other metals or minerals could provide additional revenue streams and reduce dependency on a single commodity. This diversification could be particularly beneficial in times of fluctuating gold prices.
The future outlook for Newmont Corporation appears promising, given these potential growth opportunities. However, successful expansion and growth will depend on the company's ability to effectively manage the associated risks, including commodity price volatility, operational hazards, and regulatory compliance.
How to Profit from NEM Stock as a Trader
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There are several different profit strategies that you can explore as a trader to get the best possible profits from trading Newmont stock. Let's take a look at a few of these profit strategies:
Short-term vs. Long-term strategies: Short-term strategies aim to generate quick profits and often involve more risk. They can include strategies like day trading or swing trading.
On the other hand, long-term strategies focus on slower but steady profit growth over an extended period. They can involve buy-and-hold strategies, where investments in fundamentally sound stocks, bonds, or other assets are made, with the expectation that they will appreciate over time.
Technical analysis strategies: These strategies depend on analyzing statistical trends gathered from trading activity, such as price movement and volume. Traders use various chart patterns and technical indicators to predict future price movements. Examples include trend-following strategies and mean-reversion strategies.
Fundamental analysis strategies: Fundamental analysis strategies involve evaluating a company's financial health, industry position, and market conditions to make investment decisions. These strategies often focus on long-term investment and can involve buying stocks in undervalued companies with solid growth potential.
Implementing Profit Strategies for NEM Stock
There are some things you'll need to put in place if you're looking to make consistent profits off Newmont gold stock. Three main points here include the following:
Setting Realistic Goals
Define what you hope to achieve by investing in Newmont stock. Whether you seek short-term profits through trading or long-term appreciation via a buy-and-hold strategy, your goals should be clear, measurable, and, most importantly, attainable.
Developing a Trading Plan
A trading plan is a comprehensive roadmap for your investment journey. The plan should specify the amount of capital you're willing to invest, the level of risk you're comfortable with, your entry and exit strategies, and how long you intend to hold the investment. A well-crafted trading plan tailored to your goals and risk tolerance can guide your decision-making process.
Executing Trades with Discipline
No matter your strategy's effectiveness, it will only work if followed with discipline. This includes sticking to your trading plan, not letting emotions drive your decisions, and routinely reviewing and adjusting your strategy based on market conditions and performance outcomes. Executing trades with discipline can help mitigate potential losses and enhance investment success.
Common Mistakes to Avoid
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In putting all of the above into place, there are also some mistakes to avoid while trading Newmont stock. Some of these include the following:
● Emotion-based Trading: Making trading decisions based on fear, greed, or other emotions can lead to irrational behavior, like panic selling or buying into a hype. Instead, your decisions should depend on careful analysis and a well-defined strategy.
● Over-Trading: Excessive buying and selling not only increase transaction costs but can also lead to poor decision-making. Understanding that only some market movements provide a profitable trading opportunity is crucial.
● Lack of Flexibility: Markets are dynamic, and sticking rigidly to a strategy without considering changes in market conditions can be detrimental. Investors should be open to adjusting their strategies based on new information or changing market trends.
Are you looking to trade Newmont stock CFDs? If you are, then you'll need a CFD provider. Choosing a CFD provider is a pretty big deal because your CFD provider will have a large impact on your trading experience. Our CFD provider recommendation? VSTAR!
Trade NEM Stock CFD with VSTAR
VSTAR is a fully regulated institutional-level trading platform for CFD trading. VSTAR offers a user-friendly app that suits experienced traders as well as newcomers. The app comes with a host of features, including a minimum deposit requirement of just $50, protection from negative balances, real-time access to high-demand markets, and the availability of demo accounts for practicing trades without risk.
Some other key benefits of trading Newmont stock CFD on VSTAR include the following:
Narrow Spreads: VSTAR ensures you'll have access to very narrow spreads, thereby decreasing your trading expenses. This means you'll enjoy optimal spreads when trading Newmont stock.
Utilizing Leverage: VSTAR offers you the capability to optimize your Newmont stock trading through leverage, enabling you to open more substantial positions with a smaller upfront investment.
Exceptional Customer Assistance: VSTAR has a committed and responsive support team that is always ready to address your queries, promising an effortless trading journey.
Trading Flexibility: With VSTAR, you can capitalize on both rising and falling prices in Newmont stock, broadening your trading potential.
Conclusion
Newmont stock has all the potential indicators of being a very strong buy. However, there are several things to consider before making a final decision. When you eventually arrive at a buy decision for Newmont stock, trading Newmont golf stock CFD on VSTAR is the best option available. So download the VSTAR app today and start trading Newmont stock!
FAQs
1. Is NEM a good stock to buy?
NEM stock is considered a good long-term investment by many analysts, as it is a leading gold mining company with operations around the world.
2. Is Newmont a Buy, Sell or Hold?
Most analysts currently rate Newmont stock a "hold" or "buy. Strengths include low costs and diversified assets. Weaknesses include exposure to volatile gold prices.
3. Why is NEM dropping?
NEM stock has been falling recently due to falling gold prices, inflation concerns and investor rotation out of gold. The stock is down about 25% year-to-date.
4. What is the price prediction for Newmont stock?
Price targets for NEM stock range widely, from around $40 on the low end to $80 on the high end. The average analyst 12-month target is around $60.
5. What is the future for NEM stock?
The long-term outlook for NEM stock is more positive, with analysts expecting higher gold prices. However, the stock will remain volatile along with gold in the near term. Expansion projects are expected to support growth.
