By Contributor,Piotr Swat,Trefis Team
Copyright forbes
POLAND – 2024/12/06: In this photo illustration, the Newmont company logo is seen displayed on a smartphone screen. (Photo Illustration by Piotr Swat/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Newmont (NYSE:NEM), the leading gold miner globally, has made a remarkable recovery in 2025, driven by unprecedented gold prices and escalating free cash flow. The stock has surged towards all-time highs, yet uncertainties persist regarding whether the valuation accurately captures Newmont’s earnings capacity and dominant asset portfolio. Additionally, see – Warner Bros. Discovery Stock To $30?
Revenue & Earnings Power
In 2024, Newmont achieved revenues of approximately $18.5 billion, a substantial increase from the previous year as the average realized gold prices reached $2,250 per ounce; by mid-2025, spot gold prices exceeded $3,300, propelling profitability to unprecedented levels, with EBITDA margins surpassing 45% on all-in sustaining costs near $1,250/oz and net income of around $6.2 billion ($3.50–3.70 EPS). In Q2 2025, the company disclosed average realized gold prices of $3,320/oz, EBITDA close to $3.8 billion, net income of $2.1 billion ($1.85/share), and a record free cash flow of $1.7 billion, despite AISC slightly increasing to about $1,593/oz; with spot gold nearing $3,700 now, Newmont’s potential for earnings and cash flow seems set for additional growth, given its cost structure remains well below existing prices.
Valuation Multiples
At a recent share price around $82, Newmont is valued at about 14x trailing earnings, which is lower than many large-cap rivals in the mining industry but higher than diversified miners such as Vale or Rio Tinto because of its exclusive focus on gold. On an EV/EBITDA basis, the stock stands at roughly 8x, which aligns with historical averages. The firm provides a dividend yield of around 1.2%, relatively modest but well-supported by a payout ratio under 20% alongside substantial free cash flow generation.
Balance Sheet Strength
Newmont possesses a robust balance sheet with net debt estimated at around $8 billion, a conservative figure relative to more than $10 billion in annual EBITDA. This financial flexibility allows the company to preserve shareholder returns while reinvesting in mine expansions and reserve replenishment. Initiatives such as Tanami Expansion 2 and Ahafo North highlight Newmont’s approach to prolonging mine lifespan and maintaining top-tier asset quality, while its increasing copper production serves as a long-term diversification strategy.
The Verdict
Newmont’s valuation indicates a compromise between the favorable gold-price environment and investor skepticism regarding the sustainability of record earnings should bullion prices decline. With all-in sustaining costs significantly beneath spot prices, a forward P/E closer to 12x, and leading industry free cash flow, the stock presents a combination of stability and opportunity. If gold remains above $3,500 per ounce and copper output grows as anticipated, earnings may rise further, providing potential for a 15–20% re-rating from the current price levels.
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For the time being, Newmont offers a high-quality opportunity to engage with gold. Cyclical risks are present, but the market seems to be undervaluing the durability of its cost advantage, robust cash flows, and enhancing optionality through base metals.
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