On Friday, TD Securities adjusted its outlook on Newmont Mining Corp. (NYSE: NYSE:NEM), raising the stock's price target to $48 from $43, while keeping a Hold rating on the shares. The firm justified the increase by pointing to Newmont's effective start to its post-merger asset monetization, specifically citing the $330 million stream buyout at the Fruta del Norte mine.
The analyst noted that the first half of 2024 will be crucial for Newmont as the company aims to rebuild its cash reserves following significant tax payments. Despite this, the company's management has affirmed its commitment to a $1 billion share repurchase program. The timing of these buybacks is expected to correlate with the progress of asset sales over the forthcoming year.
TD Securities has revised its target multiples for Newmont Mining to 1.1 times Net Asset Value (NAV) at a 5% discount, up from the previous 1.0 times, and to 6.2 times the company's estimated 2025 Earnings Before Interest, Taxes, Depreciation, and Amortization (EV/EBITDA), an increase from the earlier 5.5 times multiple. This change reflects the firm's increased confidence in Newmont's ability to meet its 2024 guidance and its solid start to the asset divestment process.
Comparatively, the revised target multiples for Newmont are now broadly aligned with those used by TD Securities for Barrick, suggesting a more optimistic view of Newmont's valuation. The update follows Newmont's active approach to its asset portfolio and fiscal strategies as it navigates the post-merger landscape.
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