Newmont Corp.’s NEM stock now has a 20% upside as well as an attractive 5.4% dividend yield, according to investment bank UBS Group AG.
The Newmont Analyst: Cleve Rueckert upgraded the rating for Newmont from Neutral to Buy, while reducing the price target from $78 to $50.
The Newmont Thesis: The Denver-based company’s shares are down 33% year to date, versus a 6% decline in gold prices, Rueckert said in the upgrade note.
“Based on our simplified calculations, NEM is now trading at a 8% discount to NAV whereas in our experience gold miners typically trade at 30-50% premiums,” he added.
"Following recent management conversations, we are confident the dividend is based on a multi-year framework with visibility to falling capex in 2025," the analyst wrote. "Based on our calculations, NEM is pricing in a potential 25% dividend cut, which is too bearish in our view."
NEM Price Action: Shares of Newmont had risen by 1.78% to $42.41 at the time of publication Tuesday.
Image: Newmont Logo
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