2023-07-07 12:10:04 ET
- Newmont ( NYSE: NEM ) and Hudbay Minerals ( NYSE: HBM ) +1.8% and +6.6% , respectively, in Friday's trading after receiving upgrades to Overweight from Equal Weight at Barclays ahead of Q2 earnings results, seeing attractive valuations for both stocks.
- Barclays analyst Matthew Murphy noted Newmont ( NEM ) has underperformed the VanEck Gold Miners ETF by 15% since the start of 2023 and now trades at 1.16x price-to-NAV, well below its three-year average of 1.64x.
- Drivers of Newmont's ( NEM ) multiple erosion include operational and portfolio challenges including a deferral of Yanacocha sulfides and more recently a strike at Penasquito, and while the Newcrest deal presents some integration risks, Murphy ultimately sees these risks as being more than offset by the benefits of diversification and growth potential that are yet to be reflected in the stock's valuation.
- Murphy also noted Hudbay's ( HBM ) drop in recent months, now sitting at 0.7x price-to-NAV vs. peers at 1.25x, and sees the stock supported by improving production in Peru, the integration of Copper Mountain, the medium-term exploration story, and eventual growth from Copper World.
- Hudbay's ( HBM ) gains Friday also are helped by a Reuters report that CEO Peter Kukielski may be open to acquisition offers .
- More on Newmont:
- Financial and valuation comparison to sector peers
- Analysis: Newmont: Poor Stock Performance Should Be Addressed
- Stock price return: Down 16% YTD, down 29% in the past 12 months
For further details see:
Newmont, Hudbay raised to Buy at Barclays with merger integrations ahead