NEM: Future Barrick Dealmaking Will Likely Erode Already Stretched Share Pricing

The analyst price target for Newmont has been raised significantly, from approximately $58 to about $78 per share, as analysts factor in higher expected gold prices, improved profitability, and valuation upside relative to peers.

Analyst Commentary

Recent Street research on Newmont reflects a broadly constructive stance, with multiple firms lifting price targets and upgrading the stock on expectations of stronger gold prices, improving free cash flow, and valuation upside relative to peers. The latest target increases, which now stretch into the low to mid triple digits per share, underscore a view that the market has not fully priced in Newmont's production growth and capital return potential.

Bullish analysts highlight cyclical and tactical tailwinds for gold, as well as Newmont's scale and diversified asset base, as key differentiators. They argue that the shares still trade at a discount to comparable large cap gold producers despite a more favorable outlook for margins and cash generation. The upgrades to Buy and Outperformer, along with higher regional price targets in North America and Australia, signal growing confidence that Newmont can deliver on its growth and efficiency plans.

At the same time, the tone of the research remains selectively cautious, with some pointing to macro uncertainties and execution risk around Newmont's project pipeline. While the consensus leans positive, the gap between the current share price and the new, higher targets assumes continued operational delivery and a supportive commodity tape.

Bearish Takeaways

• Bearish analysts caution that the recent rally and sharply higher price targets leave less room for error, with valuation now baking in a constructive gold price path and robust execution on growth projects.
• Concerns persist that a weaker than expected macro backdrop, including softer Chinese demand for commodities, could pressure sentiment toward miners and limit multiple expansion even if operations remain solid.
• Some see risk that Newmont's production growth and cost improvement plans may face delays or overruns, which could undermine the upside case and widen the discount to the most efficient peers.
• There is also unease that, if gold prices consolidate or reverse, earnings leverage could work in reverse and expose investors to downside from today's richer implied growth expectations.

What's in the News

• Newmont is studying transaction structures to gain full ownership of Barrick Gold's Nevada joint venture, including options ranging from buying Barrick's JV stake to a potential full takeover followed by non core asset sales. This highlights a bold M&A push in a key jurisdiction (Bloomberg / M&A Rumors and Discussions).
• Reports that Newmont could consider a full takeover of Barrick have moved markets, with Barrick shares rising and Newmont shares falling as investors evaluate deal complexity, integration risk, and potential portfolio reshaping (Bloomberg).
• The Ahafo North project in Ghana has achieved commercial production following its first gold pour in September 2025, establishing a long life cornerstone asset expected to produce 275,000 to 325,000 ounces of gold annually over 13 years (Product Related Announcements).
• Newmont reported third quarter 2025 attributable gold production of 1.42 million ounces, down from 1.67 million ounces a year earlier, while confirming guidance that 2026 output will track the lower end of the 2025 range due to planned mine sequencing (Operating Results / Corporate Guidance).
• CEO Tom Palmer will step down at year end 2025. President and COO Natascha Viljoen is set to become Newmont's first female CEO on January 1, 2026, marking a major leadership transition at the top of the company (Executive Changes).

Valuation Changes

• Fair Value: increased significantly from approximately $58.00 to about $78.18 per share, reflecting a materially higher intrinsic value estimate.
• Discount Rate: risen modestly from roughly 7.47 percent to about 8.20 percent, implying a slightly higher required return and risk assumption.
• Revenue Growth: improved from an expected contraction of around negative 6.41 percent to a smaller decline of about negative 3.49 percent, indicating less severe top line pressure.
• Net Profit Margin: expanded sharply from approximately 22.03 percent to about 40.02 percent, signaling a substantially stronger profitability outlook.
• Future P/E: decreased meaningfully from roughly 19.10 times to about 12.68 times forward earnings, pointing to a lower valuation multiple applied to improved earnings expectations.