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Newmont (NYSE:NEM) +0.6% in Monday’s trading as UBS upgrades shares to Buy from Neutral with a $50 price target, raised from $40, saying it remains constructive on gold prices, which will drive consensus upward earnings revisions.
Newmont (NEM) has materially underperformed gold prices and mining peers due in part to poor performance relative to guidance, and UBS analyst Daniel Major says he now thinks guidance is achievable, driving positive operational momentum compared to what’s priced into justifiably skeptical investor sentiment.
Catalysts from $2B-$4B of divestments over the next 12 months should accelerate deleveraging and cash returns, Major says, noting Newmont (NEM) post-divestments will have one of the best portfolios in the industry consisting of predominantly large long-life assets in low-risk jurisdictions and attractive brownfield growth projects.
If Newmont (NEM) can rebuild investor confidence, Major believes the company can recapture a valuation premium.
