Gold Mining Company Newmont Selloff 'Overdone' After Q2 Results, This Analyst Says While Upgrading Stock

  • Canaccord Genuity has upgraded Newmont Corporation NEM to Buy from Hold, lowering the target price to $60 from $66 following the company's Q2 FY22 results. 
  • The analysts say that the 13% drop in NEM's share price yesterday was overdone with the EPS miss, including some abnormal items, such as the $70 million profit-sharing agreement at Penasquito relating to 2021, the timing of gold sales, and $105 million in negative provisional pricing adjustments. 
  • Newmont produced 1.5 million attributable ounces of gold and 330,000 attributable gold equivalent ounces from co-products, an increase of more than 130,000 total gold equivalent ounces from Q2 FY21.
  • The company revised the FY22 outlook, expecting 6 million ounces of attributable gold production and 1.3 million gold equivalent ounces from copper, silver, lead, and zinc.
  • The updated outlook for attributable gold production includes negative impacts from operational challenges.
  • Canaccord says the revised gold production guidance was broadly in line with Canaccord's prior forecast with ~2% higher AISC guidance. 
  • "We view Newmont as offering investors a steady gold production profile centered on geopolitically stable jurisdictions, with a deep project pipeline, strong balance sheet, and solid operating team." the analysts wrote.
  • Price Action: NEM shares are down 0.20% at $46.05 during the market session on the last check Wednesday.


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