Analysts expect Newmont to report revenues of $1.83 billion for the first quarter. This estimate implies growth of 0.5% year-over-year. Its EBITDA is expected to come in at $631 million, implying a margin of 34.5%.
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Newmont Goldcorp’s (NEM) stock returned -2.8% year-to-date as of April 23. It has slightly outperformed the SPDR Gold Shares (GLD) and the VanEck Vectors Gold Miners ETF (GDX), which have returned -4.2% and -3.4%, respectively, over the same period. It, however, has underperformed its peers (NUGT) Yamana Gold (AUY), Agnico Eagle Mines (AEM), and IAMGOLD (IAG), which have returned -0.7%, 43.8%, and 13.1%, respectively.
Future price action
Investors were unhappy with Newmont’s offering a premium to Goldcorp, especially given Goldcorp’s disappointing operating performance for most of 2018. The combined company’s future price action will depend on how NEM is able to justify the premium through the execution of the merger. NEM will also need to assure investors that it can turn Goldcorp’s weaker assets around or sell them for a reasonable price.
Investors should also closely listen to the earnings conference call for the company’s update regarding non-core assets and when it’s planning to dispose of them. The combined company expects that after selling its non-core assets, it could maintain annual gold (GLD) production of 6.0 million–7.0 million ounces. Plus, Newmont is expected to provide an update regarding its project pipeline.