Market Overview

Jefferies Concerned With Near-Term Headwinds For Newmont Mining, Downgrades Stock

Share:
Related NEM
10 Biggest Price Target Changes For Tuesday
Benzinga's Top Upgrades, Downgrades For January 15, 2019
The Best And Worst Performing S&P 500 Stocks So Far In 2019 (TalkMarkets)

Jefferies analysts Christopher LaFemina, Patricia Hove, and Timothy Ward, were concerned about Newmont Mining Corp (NYSE: NEM)'s headwinds in the near-term. That included possible interest rate hike, lack of favorable catalysts, and valuation after strong stock performance for the year-to-date. As a result, the brokerage downgraded the stock to Hold from Buy and slashed its price objective to $33.00 from $38.00 on the company's stock.

However, the three analysts have constructive longer-term view though they were less positive on Newmont Mining shares, as well as, other gold miners for now. The analysts justified their earlier Buy call citing the bullish view on the yellow metal. However, the threat of interest rate hike in June or July increases the negative sentiments in the shorter-term.

Jefferies said that valuation of the company's shares were fair with the current gold price of $1,213 per ounce. The analysts believe the company doesn't offer any significant organic growth and there didn't consider the stock to be attractive on valuations unless the precious metal price witnesses uptrend.

The analysts indicated, "We do not expect positive catalysts for Newmont this year. Fed rate hike is an imminent headwind: Global currency wars should be supportive of the gold price even in a rate tightening/strong US$ cycle, and safe haven demand for gold should be strong due to elevated macro risks. However, in the shorter-term, we expect US interest rate increases to be negative for the price of gold, negative for prices of other mined commodities, and negative for mining share prices in general."

The brokerage has not changed its gold price forecast of $1,200/oz for 2016-2017. However, the analysts reduced their price target on Newmont to reflect downside risk to this forecast.

Latest Ratings for NEM

DateFirmActionFromTo
Jan 2019Canaccord GenuityUpgradesHoldBuy
Jan 2019CIBCDowngradesOutperformNeutral
Oct 2018BarclaysInitiates Coverage OnOverweight

View More Analyst Ratings for NEM
View the Latest Analyst Ratings

Posted-In: JefferiesAnalyst Color Downgrades Price Target Analyst Ratings

 

Related Articles (NEM)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
AITKeyBancUpgrades0.0
MDCitigroupUpgrades0.0
PUMPBarclaysUpgrades20.0
ECPGOppenheimerUpgrades37.0
RACEBernsteinUpgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Buckingham Sees Sirius XM Continuing To Report Above-Guidance Subs

SunTrust Upgrades Equity Residential, Downgrades Apartment Investment, Camden