NEWMONT CORP

Shares of Newmont Corporation (NYSE:NEM), the largest gold mining company, suffered a significant decline of 14.7% following the release of its third-quarter 2024 results. Despite robust gold prices, the company's adjusted earnings per share of $0.81 fell short of analysts' expectations of $0.86, attributed to increasing production costs outpacing sales growth. In total, Newmont reported a net income of $924 million on revenues of $4.6 billion, signaling substantial year-over-year growth.

The company produced 2.1 million ounces of gold equivalent, surpassing previous production levels largely due to its recent acquisition of Newcrest Mining. However, this growth has not been enough to offset investor disappointment. Newmont's stock drop comes despite a year-long increase of 19%, highlighting possibly inflated expectations among shareholders.

Newmont returned $786 million to shareholders through dividends and stock buybacks, yet criticism arose for not increasing dividend payouts, as many investors had hoped. UBS analyst Daniel Major recently downgraded the company's rating from Buy to Neutral and adjusted the price target from $67 to $54, reflecting broader market concerns. Following the downgrade, shares closed at approximately $47.80.

In addition to current operational challenges, Newmont possesses around 226 million ounces of gold, though only 120.6 million ounces are deemed economically recoverable. This positions investors to effectively acquire gold at a 20% discount relative to market prices, yet investors are reminded to weigh reserve values and operational risks carefully when considering exposure to mining stocks.

With a market cap of $54.42 billion and a current trading price around $49.25, Newmont still holds potential, but investors should approach with caution given recent performance trends and market fluctuations.

net income of $924 million on revenues of $4.6 billion

$786 million to shareholders through dividends

acquire gold at a 20% discount relative to market prices

Newmont Shares Plummet 14.7% Following Disappointing Q3 Earnings Amid Rising Costs and Regulatory Concerns