What Is Going On With Newmont Stock

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Shares of Newmont (NEM) returned 29.9% over the past year, compared with 17.1% for the S&P 500. Yet the gold miner still trades at 14.5 times earnings, against 23.0 for the median S&P 500 company. Newmont's latest results show no signs of a struggling business. Buyers are either getting a solid operation at a discount, or the market doubts these profits will last. So what does a buyer actually get for that price?

Newmont Earns Wide Margins And Plenty Of Cash

Paying 14.5 times earnings buys a miner of gold, copper and silver that earns far more on its sales than most large companies. Newmont reported an operating margin of 55.2% for the twelve months to June 2026, well above the 18.5% margin for the median S&P 500 company. Revenue climbed 25.2% during that twelve-month period, while the median company grew 8.3%.

These profits arrive as cash. Newmont produces free cash flow equal to 7.8% of its market value, and the company ended June 2026 with $3.41 billion more cash than debt. It also spent $4.41 billion buying back its own shares over those same twelve months. That money comes from mines such as Nevada Gold Mines, Peñasquito and Cadia.

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Newmont's Margin Jump Came With A Higher Gold Price

Newmont's margins widened because gold became more expensive, by management's own account. The company realized an average of $4,414 an ounce in fiscal Q2 2026, about 33% more than a year earlier. On the July 23 call, management said a substantial portion of the higher gold price translated into stronger margins and free cash flow, while total costs applicable to sales rose just 4%.

Newmont's profits look far less steady over a longer timeline. The company posted a 33.4% net margin in the twelve months to June 2026, compared with an average of 16.9% over the latest three twelve-month periods. That historical average includes the twelve months to June 2024, when Newmont lost $1.98 billion.

Reverting to that 16.9% average net margin would turn the current $25.8 billion of revenue into roughly $4.4 billion of net income. That is about half the $8.6 billion of net income supporting today's P/E. The share price appears to assume that some of today's gold-price margin will not last.

What A Newmont Buyer Is Betting On

Anyone buying at this price is betting the market mispriced a sound business, not that Newmont has to fix a broken one. Management has stuck to its plan so far. Newmont reported an all-in sustaining cost, the per-ounce expense that includes the spending required to keep its mines running, of $1,621 an ounce in fiscal Q2 2026. This falls below the $1,680 the company guides for full-year 2026. Management also maintained its 2026 gold production guidance at 5.26 million attributable ounces, unchanged from April.

The gold price is one place that bet could go wrong, since management tied the margin gain to it. Costs are the other risk. On the July 23 call, management said it expected moderately higher unit costs in fiscal Q3 2026, and that each $10 a barrel change in the oil price has about a $60 million impact on a full year. Higher Ghana royalties and higher diesel prices already pushed unit costs up in fiscal Q2 2026.

When Newmont reports fiscal Q3 2026 results on or around October 22, 2026, its all-in sustaining cost per ounce against the $1,680 it guides for 2026 is the number to watch.

Is Too Much Of Your Wealth Riding On One Stock?

Whether Newmont is a bargain will take time to find out. When one position grows into a large part of your wealth, a sharp fall can hurt your whole plan, and selling to spread the money out can bring a large tax bill. Our partner advisory firm offers a free strategy review of ways to protect a concentrated position and unwind it with less tax.

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