Hook / Thesis
Newmont (NEM) is one of my top picks for 2026. The company is the largest gold producer globally and has reshaped its portfolio after the Newcrest acquisition and a string of disposals: management expects roughly 5.6 million ounces of gold production from its core mines in 2025. It is generating steady operating cash flow (Q3 2025 operating cash flow continuing was $2.298B), carries relatively modest long-term debt (about $5.18B at 09/30/2025), and returns capital to shareholders via a predictable quarterly dividend ($0.25 per share most recently declared on 10/23/2025).
My trade idea: go long NEM with a core position at current levels or on a modest dip and treat it as a multi‑quarter trade tied to the gold cycle and operational execution. The combination of robust cash flow, low nominal leverage and meaningful byproduct exposure (copper, silver) makes a clear case for owning the stock as a hedge against macro volatility and as a levered play on metal prices. I lay out concrete entry, stop and target levels below.
What the business is and why you should care
Newmont is the world’s largest gold miner. Its global portfolio spans the Americas, Africa, Australia and Papua New Guinea and — following the company’s purchases and post‑deal portfolio pruning — the company expects to sell roughly 5.6 million ounces of gold in 2025 from its core mines. Beyond gold, Newmont produces copper, silver, zinc and lead as byproducts, which matters because copper exposure helps Newmont participate in electrification/industrial demand if base‑metal prices firm.
Why the market should care: mining equities trade on two axes — metal prices and company cash generation / portfolio quality. Newmont checks both boxes: large scale that produces predictable free cash flow, and a balance sheet that can support dividends, buybacks and opportunistic M&A. In Q3 2025 Newmont reported revenues of $5.524B and net income attributable to parent of $1.832B (filing dated 10/23/2025). Operating income was $2.576B in that quarter and operating cash flow (continuing) was $2.298B. Those are not small numbers: they underpin dividend coverage and give management optionality if commodity prices rise further.
Recent financials and the supporting numbers
- Q3 2025 (period 07/01/2025 - 09/30/2025, filing 10/23/2025): revenues $5.524B; operating income $2.576B; net income $1.843B; operating cash flow continuing $2.298B; net long‑term debt $5.18B; total assets $54.69B; equity attributable to parent $33.226B.
- Q2 2025 (filing 07/24/2025): revenues $5.317B; net income $2.075B; operating cash flow continuing $2.384B.
- Q1 2025 (filing 04/24/2025): revenues $5.010B; net income $1.902B; operating cash flow continuing $2.031B.
Across the first three quarters of fiscal 2025 the company has consistently produced >$2B of operating cash flow per quarter — strong free cash generation for a major miner. The balance sheet shows assets of $54.69B and liabilities of ~$21.28B at 09/30/2025; long‑term debt sits near $5.18B. That leaves Newmont with net leverage that the market should view as conservative for a global miner of this scale.
Valuation framing
The dataset does not include a published market cap, so I approximate: the most recent minute trade in the snapshot shows a price of $106.39. Diluted average shares in recent filings are roughly 1.09–1.12 billion (for Q3 2025 diluted average shares are 1.10B). Multiplying 1.10B shares by $106.39 implies a market capitalization in the neighborhood of $117B (this is an approximation based on reported diluted share counts and the snapshot price).
For a back‑of‑envelope P/E: annualizing the latest quarter's net income (Q3 2025 net income $1.843B x 4 = ~$7.37B) yields an implied P/E around 15–16x at the approximated $117B market cap. That is a mid‑cycle multiple for a large diversified producer with low nominal leverage and reliable cash flow. Compared to history and the broader mining complex, a sub‑20x multiple for a company with Newmont’s scale, dividend policy (quarterly $0.25) and byproduct optionality looks reasonable — not cheap enough to be a panic buy, but attractive if you expect gold or copper to inflect higher or for the company to increase capital returns.
Important caveat: the market cap and P/E calculation above are approximate — shares outstanding vary across filings and the snapshot price is a minute trade. Treat the numbers as directional rather than exact.
Trade idea (actionable)
Trade direction: Long NEM
Time horizon: position / multi‑quarter (3–12 months)
Risk level: Medium (commodity sensitivity + operational risk)
Entry: Accumulate 98–108 (scale in 2–3 tranches; preferentially on weakness below 105)
Stop: 95 (hard stop for the initial tranche; represents ~9–10% downside from 105)
Target 1 (near term): 120 — a moderate upside target (~12–15% from a 105 entry)
Target 2 (stretch): 140 — if gold/copper rally and sentiment improves (35%+ upside from 105)
Position sizing: risk no more than 1–3% of portfolio per initial tranche (adjust to your risk tolerance)Rationale: the entry band respects recent volatility (shares traded in the $100–110 zone recently) and gives room for a sector pullback. A stop at $95 limits downside while letting the company’s operational performance play out. Targets reflect a conservative near‑term upside and a stretch scenario tied to an improved commodity backdrop or re‑rating.
Catalysts to watch (2–5)
- Gold prices: upside in gold is the clearest direct catalyst. Positive macro shocks — geopolitical risk, higher inflation expectations or rate volatility — tend to drive safe‑haven flows into gold.
- Integration / cost synergies from prior acquisitions and portfolio optimization — evidence of lower costs per ounce or successful sale of higher‑cost assets would re‑rate the multiple.
- Capital returns: acceleration of buybacks or an increase in dividend beyond the $0.25 quarterly run rate would tighten valuation if supported by cash flow (watch financing and board commentary in filings).
- Stronger base‑metal prices (copper): byproduct strength improves margins and cash generation — Newmont’s copper exposure is a growth optionality if electrification demand persists.
Risks and counterarguments
Mining is a capital‑intensive, cyclical business. I list the principal risks and a counterargument to my own thesis.
- Commodity risk - Gold and copper prices are the main drivers of Newmont’s earnings. A sustained drop in gold below structural support would compress margins and could send the stock materially lower.
- Operational & geopolitical risk - Mining operations in jurisdictions like Papua New Guinea and parts of Africa have higher operational and political execution risk. Any prolonged outage, regulatory action or unexpected cost inflator would hit production and cash flow.
- Integration risk - Newmont bought Newcrest (mentioned in corporate background). Integrating large deals and disposing of higher‑cost assets carries execution and timing risk; if synergies miss, valuation could underperform.
- Capital allocation surprises - Management has used cash for dividends and financing activity (net cash flow from financing was -$2.8B in the most recent cash flow quarter). If they accelerate spending without commensurate returns, returns to equity could be pressured.
- Macro / rates - While gold can act as a hedge to real rates, a sudden pro‑risk equity rally or a sharp re‑pricing of real yields could reduce gold’s appeal and pressure gold miners.
Counterargument: If you expect gold prices to correct substantially through 2026 (driven by a strong US dollar and higher real rates), Newmont’s multiple will look vulnerable. The company is a levered play on metals despite a conservative balance sheet, and if metal prices fall the stock would likely underperform defensives or cash equities. In that scenario I would close the long and switch to a short or wait for a lower entry near materially lower multiples.
What would change my mind
I would reduce conviction or flip my stance if any of the following occur:
- Gold and copper show a sustained downtrend with no signs of stabilization — that would compress forward cash flow expectations materially.
- Q4 2025 or subsequent quarterly filings show a material deterioration in operating cash flow or a sudden increase in net debt (e.g., large equity issuance or excessive leverage to fund payouts).
- Meaningful operational setbacks at major mines (multi‑quarter outages, major safety incidents or country‑level resource nationalization talk).
Practical notes for traders and investors
Dividends are predictable but modest: the company declared a $0.25 quarterly payment on 10/23/2025 (ex‑dividend 11/26/2025, pay 12/22/2025). Annualized that’s roughly $1.00 per share, implying a dividend yield near 0.9–1.0% at current prices — income is a small part of the total return case. The real optionality is capital appreciation if metal prices or sentiment improve.
Balance‑sheet resilience matters: long‑term debt was ~$5.18B at 09/30/2025 while equity attributable to parent was roughly $33.226B — a conservative setup for a major miner that reduces the risk of forced balance‑sheet actions during temporary commodity cycles.
Conclusion
Newmont is a pragmatic way to play a stabilized gold exposure with byproduct upside and a strong cash‑flow profile. At an implied mid‑teens P/E based on recent quarters and an approximate market cap near $117B, the shares appear fairly priced for mid‑cycle expectations. I recommend accumulation within the 98–108 entry band, a protective stop around 95 for the initial tranche, and targets at 120 and 140 depending on catalyst progression. This is a medium‑risk, multi‑quarter trade: own it if you have constructive metal price views and want a large‑cap name with a clean balance sheet; avoid or hedge it if you expect a deep correction in gold or materially higher real rates.
Disclosure: This is a trade idea and not personalized financial advice. Do your own due diligence and size positions to your risk tolerance.
Key data references
- Snapshot price used: last trade $106.39 (market snapshot)
- Most recent Q3 2025 filing: filing date 10/23/2025 — revenues $5.524B; net income $1.843B; operating cash flow $2.298B; long‑term debt $5.18B; assets $54.69B.
- Q2 2025 filing date 07/24/2025; Q1 2025 filing date 04/24/2025.