RBC Update on Newmont - Slightly PositiveThis mornings's RBC update on Newmont results. "Slightly Positive" No change to $40 US price target.
April 25, 2024
Newmont Corporation
1Q24 results; slightly positive NYSE: NEM | USD 38.60 | Sector Perform | Price Target USD 40.00
Sentiment: Positive
Our View: Slightly positive. Operating results surpassed RBCe and consensus expectations (production +5% vs cons, AISC -4% vs. cons), while financials were more mixed with FCF a disappointing -$83m. NEM commenced its asset divestiture process with $330m raised from its Lundin Gold stream sale, although we note these payments were already scheduled over 2024-26 and the received value is a discount to our modelled value (~0.8x NAV). Key to NEM's turnaround plan is the achievement of its operating targets and the reduction of debt to start share repurchases—we believe results are indicative of an initial step forward on these objectives. NEM reiterated annual guidance and 2H-weighted results, with 2Q upcoming performance disclosed to remain relatively subdued.
After this very nice run up today I expect a pullback to around the $55.00 CAD / $40 US level if not today then soon. Looks like some serious institutional buying now that they've got some clarity on where Newmont is going.
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