Newmont Corp (NEM, Financial), a giant in the metals and mining industry, has recently seen a notable increase in its stock price. Over the past week, the company's shares have surged by 5.23%, and over the last three months, the stock has gained an impressive 11.30%. Currently, Newmont Corp holds a market capitalization of $52.16 billion with a stock price of $45.24. According to GuruFocus, the GF Value of the stock is $45.19, indicating that it is fairly valued. This is a significant shift from three months ago when the stock was considered a possible value trap, suggesting investors should think twice before investing.
Company Overview
Newmont Corp, the world's largest gold miner, has expanded significantly through strategic acquisitions, including the purchase of Goldcorp in 2019 and Newcrest in November 2023. The company operates 17 mines and has interests in two joint ventures spread across the Americas, Africa, Australia, and Papua New Guinea. With an expected gold production of approximately 6.9 million ounces in 2024, Newmont is also planning to divest from its higher cost, smaller mines, which represent 20% of its forecasted sales for 2024. Besides gold, Newmont produces significant quantities of copper, silver, zinc, and lead. As of the end of December 2023, the company boasted about two decades worth of gold reserves along with substantial byproduct reserves.
Profitability Insights
Newmont's Profitability Rank stands at 6/10. The company's Operating Margin is 8.76%, which is better than 68.84% of its peers in the industry. However, its Return on Equity (ROE) is -11.57%, and Return on Assets (ROA) is -5.93%, indicating challenges in generating income relative to its equity and asset bases. Despite these figures, Newmont's Return on Invested Capital (ROIC) is 3.59%, ranking better than 86.85% of companies in its sector. Over the past decade, Newmont has maintained profitability for six years, outperforming 73.23% of its peers.
Growth Trajectory
The Growth Rank for Newmont is 7/10. Despite a slight decline in the 3-Year Revenue Growth Rate per Share of -0.50%, the company's 5-Year Revenue Growth Rate per Share increased by 1.80%. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at 16.43%, indicating a positive outlook. The EPS without NRI has seen a 5-Year Growth Rate of 5.60%, and the future 3 to 5-year estimated growth rate for EPS is an impressive 31.02%.
Investor Holdings
Notable investors in Newmont include First Eagle Investment (Trades, Portfolio), holding 17,489,441 shares, Barrow, Hanley, Mewhinney & Strauss with 3,653,727 shares, and Paul Tudor Jones (Trades, Portfolio) who owns 651,446 shares. These holdings reflect the confidence and interest from significant market players in Newmont's business strategy and future prospects.
Competitive Landscape
In comparison to its competitors, Newmont stands out with a significantly higher market cap of $52.16 billion. Its closest competitors, Anglogold Ashanti PLC (AU, Financial) and Royal Gold Inc (RGLD, Financial), have market caps of $12.14 billion and $8.8 billion, respectively. Coeur Mining Inc (CDE, Financial), another competitor, has a market cap of $2.55 billion, showcasing Newmont's dominant position in the industry.
Conclusion
Newmont Corp's recent stock performance, strategic acquisitions, and robust growth projections position it as a formidable player in the metals and mining industry. Despite some challenges in profitability metrics like ROE and ROA, the company's solid operational strategies and future revenue growth prospects make it an attractive option for investors looking for exposure in the gold mining sector. With its significant market cap and strong investor interest, Newmont is well-equipped to maintain its industry leadership and capitalize on future opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
