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On Thursday, BMO Capital Markets adjusted their outlook on Newmont Mining Corp. (NYSE: NYSE:NEM), increasing the price target from $63.00 to $64.00, while sustaining an Outperform rating on the shares. The revision follows a notably strong performance by the company in the first quarter, with the stock already delivering an impressive 43.65% year-to-date return. According to InvestingPro analysis, the company appears slightly undervalued at current levels.
Newmont Mining Corp. reported a robust start to the year, surpassing expectations with significant earnings and cash flow, including free cash flow of $1.2 billion. This figure notably exceeded BMO Capital’s projection of $0.4 billion and the consensus estimate of $0.5 billion. Key factors contributing to this financial success were higher-than-anticipated sales, favorable realized pricing due to strong provisional pricing and lower smelter charges, as well as reduced operational costs. The company maintains a strong financial position with a "GREAT" health score from InvestingPro, operating with moderate debt levels and a healthy current ratio of 1.63.
Noteworthy performances from the company’s mining operations at Cadia, Penasquito, Lihir, and Ahafo were highlighted as instrumental in driving the positive results. Additionally, Newmont demonstrated an aggressive stance on shareholder returns, repurchasing $407 million worth of stock in the month of April alone.
Looking ahead, Newmont anticipates maintaining similar production levels in the second quarter, albeit with a slight increase in all-in sustaining costs (AISC). The company also expects production to increase in the second half of 2025. BMO Capital views the first-quarter results as a solid foundation for the company’s performance in the year ahead.
In other recent news, Newmont Goldcorp Corp reported its Q1 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $1.25 against the forecasted $0.88. The company’s revenue reached $5.01 billion, exceeding the anticipated $4.57 billion, highlighting robust operational performance. Newmont also achieved a record free cash flow of $1.2 billion and completed a significant divestment program, adding $2.5 billion in net cash. Furthermore, the company produced 1.5 million ounces of gold and 35,000 tonnes of copper during the quarter. Analyst feedback from firms such as BMO Capital Markets and Scotiabank (TSX:BNS) focused on Newmont’s strategic initiatives and operational efficiencies. The company is maintaining its full-year guidance, with 52% of its gold production expected in the second half of the year. Newmont’s ongoing focus includes a $3 billion share buyback program and potential future development projects.
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