Why Newmont (NEM) Still Has Room to Rise Amid a Gold Rush and Market Turmoil

The Perfect Storm for Gold: Macroeconomic Tailwinds and Newmont’s Strategic Position

Gold has surged to record highs in 2025, with prices breaching $3,500 per ounce in early September [1]. This rally is no accident—it is the result of a confluence of macroeconomic forces. Inflation remains stubbornly elevated at 2.7% year-over-year [2], while the U.S. dollar’s weakening grip has amplified gold’s appeal as a hedge. Central banks, particularly in emerging markets, have accelerated gold purchases, with demand rising sharply since 2022 [3]. Meanwhile, geopolitical tensions—from the Russia-Ukraine conflict to U.S. trade policies—have reinforced gold’s role as a safe-haven asset [4]. Analysts at J.P. Morgan predict gold will average $3,675/oz by year-end and potentially hit $4,000/oz by mid-2026 [5].

In this environment, gold miners like Newmont Corporation (NEM) are uniquely positioned to capitalize. Yet despite its robust performance, NEM trades at a discount to its industry peers, offering a compelling entry point for investors.

Newmont’s Financial Engine: Record Cash Flows and Disciplined Buybacks

Newmont’s Q2 2025 results underscore its operational strength. The company generated $2.4 billion in cash flow from operations and $1.7 billion in free cash flow, far exceeding expectations [6]. Earnings per share (EPS) hit $1.43, a 25.44% beat over forecasts [7]. These figures reflect not only the tailwinds of higher gold prices but also Newmont’s focus on portfolio optimization. By divesting non-core assets and prioritizing high-margin Tier 1 operations, the company has bolstered long-term profitability, even as all-in sustaining costs rose 15% year-over-year [8].

Equally compelling is Newmont’s capital return strategy. In July 2025, the board approved an additional $3 billion in share repurchases, bringing the total authorization to $6 billion [9]. With a debt-to-equity ratio of 0.24 [10], Newmont has ample financial flexibility to execute buybacks without overleveraging. At current valuations, these repurchases represent a strategic allocation of capital, effectively allowing investors to buy shares at a discount to intrinsic value.

Valuation Discrepancy: NEM’s P/E vs. Industry Averages

Newmont’s trailing twelve-month (TTM) P/E ratio of 13.68 [11] starkly contrasts with the gold mining industry’s average P/E of 18.49 [12]. This 26% discount suggests the market is underappreciating Newmont’s operational discipline and cash flow resilience. For context, a P/E of 13.8 implies investors are paying just $13.80 for every $1 of earnings—a valuation that appears increasingly attractive as gold prices climb.

The disparity is even more pronounced when considering Newmont’s forward-looking metrics. At $3,500/oz gold, the company’s all-in sustaining cost of $1,250/oz [13] yields a gross margin of $2,250/oz. With production guidance of 5.5 million ounces in 2025, this translates to $12.38 billion in gross revenue, a figure that could expand further if gold prices reach $4,000/oz as projected [14].

Strategic Entry Point: Why NEM Deserves a Closer Look

Newmont’s combination of low leverage, aggressive buybacks, and industry-leading cash flow creates a rare investment opportunity. While gold’s macroeconomic drivers are well understood, the market has yet to fully price in Newmont’s operational improvements. For instance, its focus on ESG initiatives and community engagement—critical for long-term license to operate—further insulates it from regulatory and reputational risks [15].

Critics may argue that gold’s rally is speculative, but Newmont’s financials tell a different story. Its $6 billion buyback program effectively acts as a floor for the stock price, while its 13.8 P/E ratio offers a margin of safety compared to peers trading at 18x+ [16]. In a world of persistent inflation and geopolitical uncertainty, Newmont’s disciplined approach to capital allocation and cost control positions it to outperform.

Conclusion: A Gold Rush with a Clear Path

Newmont is not just riding the gold wave—it is engineering its own momentum. With record cash flows, a conservative balance sheet, and a buyback program that rewards shareholders, NEM offers a rare blend of defensive and growth characteristics. As gold prices continue to climb on macroeconomic tailwinds, Newmont’s undervalued shares present a strategic entry point for investors seeking exposure to the gold sector without overpaying.

In a market where uncertainty reigns, Newmont’s disciplined execution and favorable valuation make it a standout play in the 2025 gold rush.

Source:
[1] J.P. Morgan, Gold price predictions from... [https://www.jpmorgan.com/insights/global-research/commodities/gold-prices]
[2] CBS News, What's the gold price forecast for fall 2025? [https://www.cbsnews.com/news/gold-price-forecast-for-fall-2025/]
[3] BBC, Gold price hits record high as investors seek safety [https://www.bbc.com/news/articles/ceqyq7r8703o]
[4] CNN, Gold price hits a new record high on a weaker dollar... [https://www.cnn.com/2025/09/02/business/gold-price-record-dollar-interest-rates-intl]
[5] J.P. Morgan, Gold price predictions from... [https://www.jpmorgan.com/insights/global-research/commodities/gold-prices]
[6] Investing.com, Earnings call transcript: Newmont beats Q2 2025 forecasts [https://www.investing.com/news/transcripts/earnings-call-transcript-newmont-beats-q2-2025-forecasts-stock-dips-93CH-4152218]
[7] GuruFocus, Q2 2025 Newmont Corporation Earnings Call Transcript [https://www.gurufocus.com/stock/NEM/transcripts/3004419]
[8] Monexa.ai, Newmont (NEM) Earnings: Gold Price Drives Record Free Cash Flow [https://monexa.ai/blog/newmont-nem-earnings-gold-price-drives-record-free-NEM-2025-06-12]
[9] GuruFocus, NEM (Newmont) Debt-to-Equity : 0.24 (As of Jun. 2025) [https://www.gurufocus.com/term/debt-to-equity/NEM]
[10] FullRatio, NEM - NEWMONT PE ratio, current and historical analysis [https://fullratio.com/stocks/nyse-nem/pe-ratio]
[11] Zacks, Newmont (NEM) Pe Ratio (TTM) [https://www.zacks.com/stock/chart/NEM/fundamental/pe-ratio-ttm]
[12] Farmonaut, Impact Of Increased Gold Demand: Top Gold Mining Stocks 2025 [https://farmonaut.com/mining/impact-of-increased-gold-demand-top-gold-mining-stocks-2025]
[13] Reuters, Goldman Sachs sees gold prices surpassing $4000 if investors ramp up buying [https://www.reuters.com/business/goldman-sachs-sees-gold-prices-surpassing-4000-if-investors-ramp-up-buying-2025-09-04/]
[14] J.P. Morgan, Gold price predictions from... [https://www.jpmorgan.com/insights/global-research/commodities/gold-prices]
[15] Farmonaut, Newmont Mining Investor Relations: 2025 Growth [https://farmonaut.com/mining/newmont-mining-investor-relations-2025-growth]
[16] Zacks, Newmont (NEM) Pe Ratio (TTM) [https://www.zacks.com/stock/chart/NEM/fundamental/pe-ratio-ttm]