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Newmont Mining’s Fiscal 2016 Results: What Do the Analysts Think?

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Analyst ratings

Of the 19 analysts covering Newmont Mining (NEM), 11 issued “buy” recommendations and seven issued “hold” recommendations on the stock. Newmont Mining comprises 6.1% of the holdings of the VanEck Vectors Gold Miners ETF (GDX). The SPDR Gold Shares ETF (GLD) provides exposure to spot gold prices.

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Target price changes

Analysts have given the company a consensus target price of $39.90 compared to its current market price of $36.00. This target implies an upside potential of 10.8%.

In keeping with the company’s share price appreciation to date, analysts raised their consensus target price for the stock by 105% in the last year.

Upgrades and downgrades

Credit Suisse (CS) cut its target price from $53 to $51 while maintaining its “outperform” rating, and it believes that the company’s project pipeline is better than expected. Credit Suisse noted that Newmont Mining is its top pick, mainly due to the company’s “operational consistency, attractive relative valuation and strong track record of adding to its net asset value.”

Citigroup (C) cut its recommendation from “buy” to “neutral” and cut its target price from $44 to $34.

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J.P. Morgan (JPM), on the other hand, upgraded Newmont from “neutral” to “overweight,” while increasing its target price from $41 to $43 on November 3, 2016. J.P. Morgan explained its rationale for the upgrade: “We feel Newmont has lagged the sector at a time when investors should be taking another look at gold, given the increased interest in the metal in part on political uncertainty ahead of next week’s election.”

Investors should note that JPM’s upgrade came before the recent bout of weakness had hit gold. Donald Trump’s win was expected to be a win-win situation for gold, but it hasn’t come to pass yet.

Following are the other changes in the target prices and ratings for Newmont Mining:

  • CIBC raised its target price from $44 to $48 on February 22, 2017.
  • Scotiabank reaffirmed its “sector perform” rating for Newmont Mining on January 10, 2017.
  • Standpoint Research upgraded Newmont Mining (NEM) from a “hold” to a “buy” on December 29, 2016.
  • On January 10, 2017, Barclays and Jefferies both raised their target prices for Newmont.
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