Newmont Stock Slips Below 50-Day SMA: What Should Investors Do Now?
May 19, 2025
Newmont Corporation
’s NEM stock slipped below the 50-day simple moving average (SMA) last Wednesday, flashing a bearish signal. The stock also closed below its 50-day SMA at $50.10 last Friday. The pullback is largely a function of retreating gold prices. Bullion prices have fallen from the record highs clocked in April as the U.S.-China trade discussions have reduced safe-haven demand. Easing U.S. inflation also contributed to the downside.
Nevertheless, the NEM stock is currently trading above its 200-day SMA, suggesting a long-term uptrend. The 50-day SMA is also reading higher than the 200-day SMA, following a golden crossover on April 16, 2025, indicating a bullish trend.
NEM Stock Trades Below 50-Day SMA
Image Source: Zacks Investment Research
Amid falling gold prices, Newmont’s shares have lost 9.3% over the past month, outperforming the Zacks Mining – Gold industry’s 11.3% decline but underperforming the S&P 500’s rise of 15.3%. Among its gold mining peers,
Barrick Mining Corporation
B,
Agnico Eagle Mines Limited
AEM and
Kinross Gold Corporation
KGC have lost 12.8%, 13.8% and 8.2%, respectively, over the same period.
NEM’s One-month Price Performance
Image Source: Zacks Investment Research
Given the pullback in Newmont’s shares, investors might be tempted to snap up the stock. But is this the right time to buy NEM? Let’s find out.
NEM Well Poised on Project Execution & Newcrest Buyout
Newmont continues to invest in growth projects in a calculated manner. The company is pursuing several projects, including Tanami Expansion 2 in Australia, the Ahafo North expansion in Ghana and Cadia Panel Caves in Australia. These projects should expand production capacity and extend mine life, driving revenues and profits.
The acquisition of Newcrest Mining Limited has also created an industry-leading portfolio with a multi-decade gold and copper production profile in the most favorable mining jurisdictions globally. The combination of Newmont and Newcrest is expected to deliver significant value for its shareholders and generate meaningful synergies. NEM has achieved $500 million in annual run-rate synergies, following the Newcrest buyout.
Newmont also remains committed to divesting non-core businesses as it shifts its strategic focus to Tier 1 assets. NEM’s attributable gold production rose around 9% year over year in the fourth quarter on strong performance from its managed Tier 1 portfolio. The company, in March 2025, completed the divestment of three non-core assets — the Musselwhite and Eleonore operations in Canada and the Cripple Creek & Victor (CC&V) operation in Colorado. The sale of these three additional non-core assets resulted in total after-tax cash proceeds of $1.7 billion before closing adjustments. Furthermore, NEM completed its non-core divestiture program last month with the sale of its Akyem operation in Ghana and its Porcupine operation in Canada, generating total after-tax cash proceeds of roughly $850 million before closing adjustments. Total gross proceeds from disclosed divestitures are expected to reach $4.3 billion, including $3.8 billion from non-core divestitures and $527 million from the sale of other investments.
Sound Financial Health Supports NEM’s Capital Allocation
Newmont has a strong liquidity position and generates substantial cash flows, which allow it to fund its growth projects, meet short-term debt obligations and drive shareholder value. At the end of the first quarter of 2025, Newmont had liquidity of $8.8 billion, including cash and cash equivalents of around $4.7 billion. Its operating cash flow from continuing operations soared roughly 162% year over year to around $2 billion in the first quarter. NEM also generated a record free cash flow of $1.2 billion in the quarter. NEM delivered $1 billion to its shareholders through dividends and share repurchases and reduced debt by $1 billion since the beginning of 2025. Its long-term debt-to-capitalization is around 20%.
Newmont stands to benefit from the strength in gold prices, which should translate into higher average realized gold prices, driving its profitability and cash flow generation. NEM’s average realized prices of gold jumped around 41% year over year to $2,944 per ounce in the first quarter, leading to a rise in its top and bottom lines.
Despite the recent pullback due to easing trade tensions, gold prices have gained roughly 22% this year. The aggressive trade policies, including sweeping new import tariffs announced by President Donald Trump, intensified global trade tensions and heightened investor anxiety, leading to the price rally. Also, central banks worldwide have been accumulating gold reserves, led by risks arising from Trump’s policies. Prices of the yellow metal catapulted to a record high of $3,500 per ounce on April 22 amid President Trump's criticism of Federal Reserve Chair Jerome Powell and call for an immediate reduction in interest rates. Increased purchases by central banks, hopes of interest rate cuts, and geopolitical tensions are expected to support gold prices. Gold prices remain above the $3,200 per ounce level despite the recent decline.
NEM offers a dividend yield of 2% at the current stock price. Its payout ratio is 24% (a ratio below 60% is a good indicator that the dividend will be sustainable). Backed by strong cash flows and sound financial health, the company's dividend is perceived as safe and reliable.
Newmont’s earnings estimates for 2025 have been going up over the past 60 days. The Zacks Consensus Estimate for second-quarter 2025 has also been revised higher over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $3.92, suggesting a year-over-year growth of 12.6%. Earnings are expected to register roughly 37.5% growth in the second quarter.
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Image Source: Zacks Investment Research
A Look at Newmont Stock’s Valuation
The NEM stock looks attractive from a valuation perspective. Newmont is currently trading at a forward price/earnings of 12.07X, a roughly 11% discount when stacked up with the industry’s average of 13.57X. NEM is trading at a premium to Barrick and a discount to Agnico Eagle and Kinross Gold. Newmont, Barrick and Kinross Gold have a Value Score of A, while Agnico Eagle has a Value Score of C.
NEM’s P/E F12M Vs. Industry, B, AEM and KGC
Image Source: Zacks Investment Research
Final Thoughts: Buy NEM Shares
Despite the recent dip below its 50-day SMA, Newmont presents an attractive investment case backed by a robust portfolio of growth projects, strong performance of its Tier 1 assets and solid financial health. Other positives include rising earnings estimates and a healthy growth trajectory. Higher realized gold prices should also boost NEM’s profitability and drive cash flow generation. NEM’s cheap valuation should lure investors seeking value. With a positive earnings outlook, Newmont looks poised to deliver attractive returns to its investors, making this Zacks Rank #2 (Buy) stock a prudent choice to bet on for those looking to capitalize on still-favorable gold market conditions.
You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
