Newmont risks ‘more than offset’ – Barclays

Newmont Goldcorp Corp (NYSE:) was lifted to Overweight from Equal Weight at Barclays on Friday, with analysts lowering the firm’s price target on the stock to $61 from $62 per share.

They stated that “NEM has underperformed the by 15% since the start of 2023. It now trades at 1.16x P/NAV, well below its 3yr average of 1.64x.”

“Drivers of the multiple erosion include operational and portfolio challenges including a deferral of Yanacocha Sulfides and more recently a strike at Penasquito, as well as M&A with multiple bumps to its offer to acquire NCM,” they added.

The analysts acknowledged that the NCM deal does present some risks, but they ultimately see them as being more than offset by the benefits of diversification and growth potential that are yet to be reflected in NEM’s valuation.

“While the NCM transaction still requires shareholder approvals, with no interlopers and deal closure expected next quarter, we are now integrating the NCM assets into our model. We value NEM with unchanged 1.7x levered P/NAV (1.6x unlevered) and 9.0x EV/EBITDA (NTM+1) target multiples, weighted 70/30%,” the analysts concluded.