What To Expect From Newmont’s Q1 2023 Earnings

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Newmont Mining

Newmont Corporation (NYSE: NEM), the world’s largest gold miner, is expected to publish its Q1 2023 earnings on April 21, reporting on a quarter that saw a meaningful run-up in prices. We expect the company’s revenues for the quarter to stand at about $3.62 billion, slightly ahead of the consensus estimates, and an increase of about 20% versus last year.  We anticipate that earnings will come in at about $0.55 per share, compared to a consensus of $0.53 per share. See our analysis of Newmont Mining Earnings Preview for more details on what to expect when Newmont reports earnings.

Prices for the yellow metal have risen from around $1,830 per ounce in early January 2023 to a little over $2,000 currently amid stress in the banking system and worries about the global economy. Inflation has also cooled off a bit versus last year, and the Federal Reserve has also slowed down on the pace of its interest rate hikes. This could help Newmont’s price realizations to an extent. Moreover, production could also pick up a little. For 2023, the company has guided for 5.7 and 6.3 million gold ounces, compared to about 6 million ounces for 2022. Margins could also potentially see some improvement. Energy prices have cooled a bit in recent months, and this could help lower the company’s gold production costs, helping margins in the medium term.

So is Newmont stock still a buy at current levels of around $50 per share? The near-term trend for gold prices appears bullish and Newmont’s production outlook also looks positive. The company’s gold mineral reserves stand at about 96 million ounces, a large portion of which is located in low-risk regions such as North America. The company has also fairly consistently raised its gold production, with plans to boost gold production from around 6 million ounces in 2022 to as much as 6.7 million ounces by around 2027. Newmont’s dividend is also thick, with the annual payment standing at over $2 per share, translating into a dividend yield of about 4% at the current market price. This could make the stock attractive to investors. We have a $51 price estimate for Newmont stock, which is slightly ahead of the current market price. See our analysis of Newmont’s valuation for more details on what’s driving our price estimate for the stock.

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 Returns Apr 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 NEM Return 1% 5% 46%
 S&P 500 Return 0% 7% 83%
 Trefis Multi-Strategy Portfolio 0% 8% 239%
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[1] Month-to-date and year-to-date as of 4/12/2023
[2] Cumulative total returns since the end of 2016

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