Hook / Thesis
The pullback in Newmont Corporation (NEM) looks like a classic buy-the-dip opportunity for investors wanting leveraged exposure to gold and other precious-metal upside. NEM is a cash-generative, low-cost industry leader — expected to produce roughly 5.6 million ounces of gold in 2025 — and its recent weakness appears driven more by macro fear than by a deterioration in the company’s operating profile.
At the market snapshot price of $121.30 (as of 02/10/2026) the stock offers a compelling risk-reward if gold rallies or geopolitical risk pushes safe-haven demand higher. Below I outline why the business matters, the key financials that support a dip-buy thesis, a concrete trade plan (entry, stop, targets), catalysts to watch and what would change my view.
What Newmont Does and Why the Market Should Care
Newmont is the world’s largest gold miner. The company’s global portfolio spans the Americas, Africa, Australia and Papua New Guinea and includes 11 core mines plus interests in two joint ventures. Management completed the Newcrest acquisition in 11/2023 and has since been reshaping the portfolio, selling higher-cost or smaller mines and targeting roughly 5.6 million ounces of gold production from core mines in 2025. Newmont also produces copper, silver, zinc and lead as material byproducts, which helps diversify revenue when non-gold metals rally.
Why this matters: gold miners are a leveraged play on bullion. When gold rallies, incremental revenue drops to the bottom line quickly because much of a mine’s cost base is fixed. Newmont’s scale, multi-decade reserves and exposure to byproduct metals mean it participates both on direct gold moves and on commodity rallies more broadly.
Recent financials that back the case
- Revenue (Q3 2025): $5.524 billion. Solid top-line for a single quarter and roughly consistent with the company’s size and production guidance.
- Operating cash flow (Q3 2025): $2.298 billion. Strong cash generation in the most recent quarter, supporting capital allocation flexibility.
- Net income (Q3 2025): $1.843 billion and diluted EPS of $1.67 for the quarter. Annualizing the quarter gives an indicative EPS run-rate (~$6.68) and an approximate P/E in the high-teens (see valuation section for the math and caveats).
- Balance sheet: Total assets of $54.69 billion and equity attributable to parent of $33.226 billion at the Q3 2025 reporting point. Long-term debt has meaningfully declined versus prior quarters — long-term debt was $5.18 billion in Q3 2025, down from levels above $7 billion earlier in the year and over $8.5 billion in 2024 — giving Newmont more flexibility and less refinancing risk.
- Cash returns: Newmont has a regular quarterly dividend (recently set at $0.25 per share per quarter), implying an annualized dividend of ~$1.00. At $121.30 this is a modest yield (~0.8%) but signals the company supports steady cash returns.
Valuation framing
Using the most recent diluted share count (Q3 2025 diluted average shares: 1.10 billion) and the current price ~$121.30, an indicative market capitalization is roughly $133 billion (121.30 * 1.10B). If you annualize the most recent quarter's EPS (1.67 * 4 = ~6.68) the implied earnings are about $7.35 billion, which produces an approximate P/E of ~18x.
Two important caveats: miners’ earnings and margins swing with metal prices and quarterly production variances; annualizing one quarter biases results if there are seasonality or lump-sum items. Still, the rough metric shows NEM trades at a mid-to-high-teen multiple on a notional run-rate — reasonable for the largest, lower-cost producer with a cleaner balance sheet than many peers.
Trade Plan - Buy the Dip (Actionable)
Trade Direction: LONG (levered exposure to gold / precious metals)- Entry: Scale into 50% of target position at $118 - $122 (current range). Add remaining 50% on a secondary dip to $105 - $112. This staged approach captures the current price while reserving allocation if the pullback deepens.
- Initial Stop: $98 (hard stop). A close below $98 suggests the decline is broader and not just a short-term gold-driven wobble — cut size to limit downside.
- Targets:
- Near-term (6-12 weeks): $140 (≈+15% from current). A small bounce with rising gold and momentum flow typically pushes leading miners into this territory.
- Medium-term (3-9 months): $165 (≈+36%). This assumes a sustained gold leg higher or a risk-off macro shock.
- Stretch (12+ months): $200 if gold and metals enter a multi-quarter bull market and Newmont realizes synergies from recent portfolio changes.
- Position sizing note: Because miners are commodity-sensitive, limit a single-trade position to a fraction of portfolio (e.g., 2-5% of total capital for most retail investors). Trailing stops and partial profit-taking (e.g., trim 30% of the position at the first target) help manage volatility.
Catalysts to drive the trade
- Upside in gold prices - safe-haven flows or geopolitical risk can lift bullion quickly (recent headlines in 01/26/2026 and 02/08/2026 show renewed ETF and price momentum in the sector).
- Operational execution and cost discipline - continuing to sell higher-cost, non-core mines and focus on lower-cost production improves margins and free cash flow per ounce.
- Balance-sheet improvements - the decline in long-term debt from prior quarters (Q1-Q2 2025 vs Q3 2025) reduces refinancing risk and supports potential buybacks or dividend stability.
- ETF and passive flows into gold-linked products - headline-driven inflows can magnify miner upside intra-quarter.
Risks and counterarguments
- Macro - rising real rates and a stronger dollar: higher interest rates and dollar strength typically pressure gold and mining equities. If central bank policy shifts continue to surprise to the hawkish side, NEM will likely underperform regardless of its fundamentals.
- Commodity volatility: gold and byproduct prices (copper, silver) can swing violently. Miners’ profitability depends on metal prices; a sustained fall could erase expected gains and compress margins.
- Operational and jurisdictional risk: mines are subject to production outages, permitting, labor and geopolitical issues. Unexpected operational disruptions at large assets would hit near-term cash flow.
- Execution on portfolio moves and integration risk: the company has been reshaping its asset base after the Newcrest acquisition. Integration costs, unexpected liabilities or slower-than-expected synergies could weigh on profits.
- Liquidity / technical risk: mining stocks can gap lower on headline selling; stop placement at $98 is designed to limit catastrophic equity downside, but slippage is possible in fast-moving markets.
Counterargument: One could argue this is not a dip but the start of a longer down-leg for miners if the macro backdrop shifts (higher-for-longer rates, slower global growth). In that scenario, smaller producers and higher-cost assets will lead the weakness and Newmont's size may not protect it from sector compression. If gold price action fails to stabilize by 12 weeks and operational guidance is cut, I would move to neutral or take profits.
What would change my mind
- If Q4/Q1 operational guidance shows a material drop in realized production (missing the ~5.6M oz 2025 run-rate materially) I would revise my thesis down.
- If long-term debt rebounds materially or cash flow from operations deteriorates (operating cash flow below the recent quarterly run-rate of $2.3B on a sustained basis), I would view the balance-sheet story as weaker.
- Conversely, sustained gold strength above prior highs, continued debt reduction and visible buybacks would reinforce a larger allocation and push me to recommend a longer-term buy-and-hold stance.
Conclusion
Newmont is a high-quality, large-cap way to play precious-metals upside. The company brings scale, improving leverage metrics and strong operating cash flow to the table. At ~$121, the stock is a practical buy-the-dip trade for traders and investors who accept commodity cyclicality and use disciplined risk management. Follow the entry ladder, respect the stop at $98, and treat the trade as a tactical allocation that benefits from improving gold sentiment or sector-specific catalysts.
Timeframe: swing-to-position. Risk level: high — miners are volatile and sensitive to macro and metal-price shocks. Keep position sizes moderate, trim into strength, and monitor gold price action and quarterly operational reports closely.
Data notes: Prices and financials cited are drawn from the company's most recent reported quarter (fiscal Q3 2025) and the market snapshot as of 02/10/2026. Market-cap math uses the recent diluted average share count from filings; treat that market-cap as an approximate figure for valuation framing rather than a precise, real-time market-cap from an exchange.
Disclosure: This is a trade idea for educational purposes and not personalized investment advice.