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Q3 Earnings Preview for Newmont (NYSE:NEM)

in EARNINGS/INVESTING IDEAS by

Newmont Corporation (NYSE:NEM) is scheduled to report Q3 earnings results before markets open for trading on October 29, 2020.

The company is expected to report earnings of $0.84/share on revenue of $3.26 billion. The consensus earnings per share (EPS) of $0.84/share is based on a poll of 15 analysts and represents a growth in eps of 132.9% over the same quarter last year, when the company reported earnings of $0.36/share.

The revenue forecast of $3.26 billion based on a poll of 7 analysts implies a year-over-year (YoY) growth in revenue of 20.2%. Last year the company reported $2.713 billion in revenue for the quarter.

Expected to report EPS growth of 132.9% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $3,260.34 $2,713.00 20.2%
EPS $0.84 $0.36 132.9%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 3 quarters.

What are your expectations from Newmont Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.31 $0.32 3.3% Beat
Q1, 2020 $0.42 $0.40 −4.9% Missed
Q4, 2019 $0.48 $0.50 5.1% Beat
Q3, 2019 $0.39 $0.36 −6.6% Missed
Q2, 2019 $0.23 $0.12 −47.4% Missed
Q1, 2019 $0.27 $0.33 24.0% Beat
Q4, 2018 $0.26 $0.40 53.5% Beat
Q3, 2018 $0.19 $0.33 72.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 1.9%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $67.89 $69.20 1.9% Increase
May 5, 2020 $62.74 $62.43 −0.5% Decline
February 20, 2020 $46.17 $49.44 7.1% Increase
November 5, 2019 $38.89 $37.65 −3.2% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.58, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.58 implies a 0.5% chance of earnings manipulation.

Fundamentals And Technical Analysis

Newmont Corporation is currently trading at $60.32/share, down −0.2% for the day. The company is trading at approximately 83.5% of its 52-week high of $72.22/share. The company’s stock price is down −12.8% since the last earnings report and down −1.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 35.31 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:NEM Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 12.09 and a forward P/E multiple of 24.26.

Newmont Corporation’s current share price also implies a price-to-book (P/B) multiple of 2.20. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $60.32
P/E Ratio 12.1x
P/E Ratio (Fwd) 24.3x
PEG Ratio 0.0
Total Debt / Total Capital 12.1%
Levered Free Cash Flow $2.13 billion
EV / EBITDA 10.5x

Finbox

Newmont Corporation is a large-cap stock with a market capitalization of $48.49 billion and a total enterprise value of $51.94 billion. The company operates in the Materials sector and the Metals & Mining industry.

Newmont Corporation engages in the production and exploration of gold, copper, silver, zinc, and lead. The company has operations and/or assets in the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, and Ghana. As of December 31, 2019, it had proven and probable gold reserves of 100.2 million ounces and land position of 68,300 square kilometers. The company has a strategic alliance agreement with Kirkland Lake Gold Ltd. to assess regional exploration opportunities around the company’s Timmins properties and Kirkland’s Holt Complex in Ontario, Canada. Newmont Corporation was founded in 1916 and is headquartered in Greenwood Village, Colorado.

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