JPMorgan assumes Newmont stock coverage with overweight rating
Investing.com - JPMorgan initiated coverage on Newmont Corp (NYSE:NEM) with an overweight rating and set a price target of AUD226.00, up from AUD201.00, analyst Jonathon Sharp said.
The firm projects Newmont can deliver a 5% production compound annual growth rate from 5.3 million ounces in fiscal 2026 to approximately 6 million ounces in fiscal 2029. JPMorgan forecasts an EBITDA margin of around 67% for the world’s largest gold miner, which reported EBITDA of $13.85 billion over the last twelve months. The company’s financial strength is reflected in its perfect Piotroski Score of 9, indicating robust operational and financial health.
JPMorgan raised its gold price forecasts for fiscal years 2026, 2027, and 2028 by approximately 10% and increased its long-term real gold price estimate by 15% to $4,600 per ounce. The firm expects Newmont to hold roughly $8 billion in net cash in fiscal 2026.
The bank forecasts average medium-term free cash flow yields of approximately 11%, which it said would support growth options and capital returns. JPMorgan values Newmont at 0.75 times price-to-net present value, 5 times fiscal 2027 enterprise value to EBITDA, and 10% fiscal 2027 free cash flow yield. The stock currently trades at a P/E ratio of 20.15 with a notably low PEG ratio of 0.15, suggesting attractive valuation relative to growth prospects. InvestingPro analysis indicates the stock is undervalued based on Fair Value metrics, with 16 additional ProTips available to subscribers.
JPMorgan’s commodities team maintains a bullish stance on gold amid the current geopolitical backdrop and continued central bank buying. Newmont’s stock has delivered a remarkable 182% return over the past year, outperforming during the precious metals rally.
In other recent news, Newmont Corporation has been the focus of several analyst updates. Bernstein SocGen Group upgraded Newmont’s stock rating to "Outperform" from "Market Perform," citing a positive outlook on gold prices and adjusting its price target to $157. In contrast, BMO Capital reduced its price target for Newmont to $140, citing challenges such as increased costs and a 7% decline in production year-over-year to 5.3 million ounces. Additionally, the firm’s reserves and resources of contained gold dropped by approximately 12%. Meanwhile, Raymond James highlighted potential short-term downside risks for Newmont’s stock, noting technical indicators of a corrective phase. These developments come amid fluctuating gold prices, influenced by strong U.S. labor data and a weaker dollar.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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