NEM - Why Newmont Stock Is A Strong Golden Pick
2024-04-08 01:25:25 ET
Summary
- The price of gold has recently surged after years of stagnation. It may potentially reach $2,600 per ounce if long-term real interest rates continue to weaken.
- Newmont Corporation, the largest gold mining company, reported strong financials with a YoY growth of 23% in sales, but concerns about project spending and geopolitical risks remain.
- Newmont Corporation embodies a cyclical narrative. Some various macroeconomic and idiosyncratic factors suggest that the cycle for Newmont is once again turning bullish.
- NEM stock is undervalued and has the potential to reach $52.75, indicating a potential upside of 33% if management successfully implements cost management plans and gold prices remain strong.
- Anticipating growth in net profits over the next couple of years, I assign a "Buy" rating today.
Introduction
Looking at recent market trends, it is easy to overlook the fact that the price of gold has suddenly shot up after many years of stagnation and has outperformed the majority of other assets over the past few months:
Seeking Alpha, author's notes
