Raymond James has increased its price target for Newmont Corporation (NEM, Financial) from $63 to $66, while maintaining an Outperform rating on the stock. This decision comes in light of Newmont's performance in the first quarter and its projections for 2025.
The second quarter is anticipated to see a decline in free cash flow for Newmont due to several factors. These include the sale of non-essential assets, which is expected to have a negative impact. Additionally, higher tax payments are predicted as a result of increased profitability in prior periods and taxes related to these divestments.
Newmont is also set to increase planned development capital investments at its Ahafo North and Cadia projects. Furthermore, there will be increased spending associated with the ongoing construction of the Yanacocha water treatment facilities. These strategic development steps, while temporarily affecting cash flow, are part of Newmont's broader long-term growth strategy.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Newmont Corp (NEM, Financial) is $63.72 with a high estimate of $77.50 and a low estimate of $52.00. The average target implies an upside of 14.40% from the current price of $55.70. More detailed estimate data can be found on the Newmont Corp (NEM) Forecast page.
Based on the consensus recommendation from 20 brokerage firms, Newmont Corp's (NEM, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Newmont Corp (NEM, Financial) in one year is $48.86, suggesting a downside of 12.28% from the current price of $55.7. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Newmont Corp (NEM) Summary page.
NEM Key Business Developments
Release Date: April 23, 2025
- Gold Production: 1.5 million ounces.
- Copper Production: 35,000 tonnes.
- Free Cash Flow: $1.2 billion, a record for the first quarter.
- Cash Flow from Operations: $2 billion, a first-quarter record.
- Adjusted EBITDA: $2.6 billion.
- Adjusted Net Income: $1.25 per diluted share.
- Gold All-In Sustaining Costs: $1,651 per ounce.
- Divestment Proceeds: More than $2.5 billion in after-tax cash proceeds this year.
- Debt Reduction: $1 billion repaid since the start of the year.
- Share Repurchases: $755 million so far this year.
- Cash Balance: $4.7 billion at the end of the quarter.
- First Quarter Dividend: $0.25 per share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Newmont Corp (NEM, Financial) reported a record first quarter free cash flow of $1.2 billion, driven by strong operational performance and favorable gold prices.
- The company successfully completed its divestment program, generating over $2.5 billion in after-tax cash proceeds this year, which strengthens its balance sheet.
- Newmont Corp (NEM) achieved a notable decrease in the frequency of significant potential safety events, reflecting improvements in its safety culture.
- The company is on track to meet its full-year guidance, with first-quarter production of 1.5 million ounces of gold and 35,000 tonnes of copper.
- Newmont Corp (NEM) has completed approximately $2 billion in share repurchases from its $3 billion program, demonstrating a commitment to returning capital to shareholders.
Negative Points
- The company anticipates increased working capital needs in the second quarter due to the timing of cash tax and interest payments.
- Newmont Corp (NEM) expects sustaining capital expenditures to increase in the second quarter, particularly at Cadia, which may impact cash flow.
- The divestment of noncore assets means future financial results will no longer include production and associated free cash flow from these operations.
- There is ongoing uncertainty regarding tariffs and their potential impact on the company's cost structure, particularly in consumables and labor.
- The company is in an investment cycle with higher unit costs, and there is a focus on improving margins and leveraging the full strength of its portfolio.
