Goldman Sachs puts 'buy' rating on Newmont
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The news: Goldman Sachs analysts have initiated coverage on gold producer Newmont with a ‘buy’ rating, citing its tier 1 assets and recent non-core divestments.
The numbers: The brokerage put a ‘buy’ rating on the stock, with a 12-month price target of $76.20 on Newmont’s ASX-listed shares. The stock closed at $63.78 on Monday indicating a potential upside of nearly 20%.
The context: The analysts said as the company’s major projects progress and it completes USD3 billion ($4.86 billion) of divestments, its portfolio will transition to a largely tier 1 asset base, supporting speedy de-leveraging and capital management.
They highlighted a three-year core production growth rate of 5% driven by completion of major growth projects, while non-core divestments would improve group gold all-in sustaining costs (AISC) by 5% to 8%.
Newmont acquired Australia’s Newcrest in a $26 billion deal in late 2023 to cement its place as the world’s top gold miner.
What they said: “Despite this backdrop, NEM trades at a discount at ~0.9x NAV or pricing ~USD2,150/oz long-term gold, while on proportional EBITDA, NEM trades at a ~0.5x discount vs. global peers,” the analysts said in a note.
The source: Goldman Sachs research
