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Why Raymond James Is Bullish on Newmont Despite Its Underperformance

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Nov. 20 2020, Updated 10:58 a.m. ET

Analyst ratings

Of the 19 analysts covering Newmont Mining (NEM), 53% have issued “buy” recommendations, while 42% have issued “hold” recommendations for the stock. NEM’s target price implies an upside of 20% from its current market price of $32.8. To be sure, the target price is seeing pressure, which is in line with the decline in the stock price.

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Raymond James’s initiation

Raymond James initiated coverage of Newmont stock on June 15, 2017, with an “outperform” rating and a target price of $43. Raymond James analyst Brian MacArthur believes that NEM meets the criteria of a strong opportunity in the gold space. MacArthur also seems impressed by the company’s favorable jurisdictional exposure and is encouraged by NEM’s balance sheet and cash position, which the company could use to expand its portfolio.

Notably, Newmont is listed on the S&P 500 (SPY) (SPX). Raymond James is also bullish on Agnico Eagle Mines (AEM), Kinross Gold (KGC), Alamos Gold (AGI), and Detour Gold (DRGDF).

Other rating changes

RBC Capital Markets downgraded Newmont on March 16, 2017, from “outperform” to “sector perform.” It also cut its target price for the stock from $43 to $38.

Credit Suisse (CS) cut its price target for the stock from $51 to $47 on March 3, 2017.  It now has an “outperform” rating on Newmont and believes that the company’s project pipeline is coming along better than expected.

Newmont makes up 6.1% of the VanEck Vectors Gold Miners ETF (GDX).

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