Edison Investment Research Limited
London, UK, 10 February 2021
Newmont Corporation (NEM/NGT): Initiation - The sustainable leader
Even with investment in new growth projects, we expect Newmont's pre-financing cash flows to increase by 47.4%, from US$2.6bn to US$3.9bn (or US$4.83/share) by FY25 and to continue to increase thereafter as past investment is brought to account and net debt potentially extinguished. At the same time, shareholders will also benefit from a market-leading dividend as well as a share buyback programme of approximately the same order of magnitude.
Based on nine measures across three methodologies, our blended average valuation of Newmont's shares is US$76.34/share. Stated alternatively, we calculate that Newmont's current share price of US$59.30/share discounts a real cost of equity of 7.7%, which is approximately double that implied by prevailing market conditions. This puts it on a premium rating relative to its peers, but may be justified by the company's size, track record and that fact that almost all of its operations are in top tier jurisdictions. However, Newmont remains cheap relative to its own historical valuation measures, which, on average, imply a share price over US$100/share.
All reports published by Edison are available to download free of charge from its website
About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings.
Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney.
Edison is authorised and regulated by the Financial Conduct Authority.
Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.
For more information, please contact Edison:
Charles Gibson, +44 (0)20 3077 5724, firstname.lastname@example.org
Learn more at www.edisongroup.com and connect with Edison on:
Dissemination of a CORPORATE NEWS, transmitted by EQS Group.