Newmont’s stock climbs
Newmont’s stock climbs rose by over 2% in pre-market trading on Tuesday after J.P. Morgan upgraded the stock’s rating from “neutral” to “overweight.” Analysts highlighted updated guidance and positive catalysts, including asset sales, as key drivers for this optimistic outlook.
Revised Gold and Copper Production Targets
J.P. Morgan cited Newmont’s medium-term production goals for gold and copper as pivotal. These updates, coupled with progress at major operational sites, signal stronger future performance.
Adjusted Valuation and Price Target
The upgrade includes a revised price target of A$72.50, slightly lower than the previous A$74.00. The valuation combines 10% discounted cash flow (DCF) and 90% earnings multiple modeling, aligning with the U.S. investor base, where most of Newmont’s trading activity occurs.
Operational Site Developments
Recent site visits to Newmont’s Australian operations at Tanami and Cadia revealed significant progress:
- Tanami Expansion 2: Scheduled for commissioning in the second half of 2027 with ongoing exploration and efficiency upgrades.
- Cadia Continued Operations Project: Focused on community and regulatory partnerships to extend the mine’s lifespan beyond 2050.
Boost from Asset Sales
The recent sale of the Musselwhite mine for $810 million exceeded expectations of $485 million, providing a strong financial boost. Additional asset sales planned by March 2025 could further bolster the stock’s short-term performance.
Positive Outlook Despite Valuation Adjustment
While the discounted cash flow valuation was reduced by 20%, J.P. Morgan highlighted a 12% upside potential in Newmont shares. This projection heavily factors the 1-year EV/EBITDA multiple, indicating room for further growth.
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