Newmont (NEM) at 15.6 Times Earnings: The Gold Price Does the Work
Newmont sold gold at an average of $4,414 an ounce in the June quarter and spent $1,621 an ounce, all in, to dig it out of the ground. Those two numbers, as summarized by Kitco’s report on the quarter, leave about $2,793 an ounce of cushion. Almost everything else about the stock follows from that gap.
The shares trade around $123.41 as I write this, 8.6% below the 52-week high of $135 and 64% above the low of $75. Market value is about $130.0 billion. On trailing earnings of $7.93 a share the multiple is 15.6, and on forward earnings of $9.77 it is 12.6. Those are numbers you would expect to see on a utility or a mature industrial, and the temptation is to call Newmont a value stock.
I think that label is wrong. A low multiple on a miner is what a high gold price looks like from the inside, and my view is that the multiple deserves no more trust than the metal price behind it.
Margin is the story, not volume
Start with the size of the swing. Revenue in 2025 was $22.7 billion, up 21% from $18.7 billion in 2024. Net income was $7.2 billion, against $3.4 billion the year before. So sales rose about a fifth while profit more than doubled. Gross margin moved from 38.2% to 53.2%, and the operating margin now sits at 49%. The underlying statements are on Newmont’s financials page if you want to check them.
A mine has costs that barely move with the price of what it digs up. Labor, diesel, and equipment are set by the site. When gold rises, nearly all of the extra revenue drops to profit, which is why net income can double on a 21% revenue gain. Go back to 2022, when revenue was $11.9 billion: it has risen by about 91% since, and 2025 net income reached $7.2 billion.
The reverse also holds, and it is the part that cheerful charts skip. The quarterly figures show it in miniature. Revenue in the latest quarter was $6.1 billion, up 15% on a year earlier, yet down -16% from the prior quarter, in a period when Kitco noted that gold had corrected by about 13%. Revenue fell by a sixth in three months while the company kept mining at the same pace.
What a 10% move in gold does
Here is a rough exercise, and I want to be clear that it is my arithmetic, not the company’s. Newmont guided to about 5.26 million ounces of attributable gold production this year, at all-in sustaining costs near $1,680 an ounce, according to the Yahoo Finance summary of the results and other coverage of the quarter. A 10% change from $4,414 is about $441 an ounce. Multiply by 5.26 million ounces and you get roughly $2.3 billion of pretax profit, before royalties, hedges, and tax.
Spread across about 1.05 billion shares (market value divided by price), that is around $2.20 a share, against trailing EPS of $7.93. So a 10% move in the metal changes annual pretax earnings by something like a quarter of what the stock currently earns. A 13% correction, like the one Kitco described, would take the cushion per ounce from $2,793 to roughly $2,220, a drop of about 21% in margin from a 13% drop in price.
That is the amplification at work. Gold moves a little, earnings move a lot.
It is also why the trailing multiple flatters the stock. Earnings of $7.93 reflect a year of high prices, so the 15.6 you see is a price paid for peak-margin earnings. If gold settles 20% lower and holds there, earnings per share fall by far more than 20%, and the same stock price would be a much higher multiple.
Reading the multiple honestly
| Metric | Newmont | Comparison |
|---|---|---|
| P/E, trailing | 15.6 | forward 12.6 |
| Implied EPS growth | 23% | forward EPS $9.77 vs trailing $7.93 |
| Price to sales | 5.0 | five-year average 3.7 |
| Price to book | 3.6 | five-year average 2.2 |
| Net margin, 2025 | 32% | operating margin 49% |
| Dividend yield | 0.83% | $1.02 a share |
I do not use the five-year P/E average here. Newmont’s earnings history includes years of losses and write-downs, so the average in my data is near 1.3, which tells you nothing. Price to sales and price to book are more usable, and both point the same way: 5.0 times sales against a five-year average of 3.7, and 3.6 times book against 2.2. The stock is more expensive than usual on assets and revenue, and cheap only on earnings. That combination is exactly what you see when margins are stretched.
The forward multiple carries an assumption too. Forward EPS of $9.77 against trailing $7.93 means analysts expect earnings to rise about 23%. They can only get there if gold stays near today’s level and the company keeps costs near guidance. So the 12.6 times forward figure is not a discount. It is a forecast of a good year, expressed as a multiple.
For a comparison with a business where earnings are steadier, look at how I framed Microsoft at 27.5 times earnings, where the multiple is high and the earnings path is comparatively boring. Newmont is the mirror image: a low multiple on a path that can bend hard either way. The same logic runs through my note on Medtronic against its own history, where a low multiple means something different because the earnings there do not depend on a commodity.
Where the risk is spread and where it is not
Newmont runs a portfolio of mines across several countries, and that helps with operating risk. A flood at one site or a permitting delay at another will not decide the year. I could not verify a current split of revenue by mine, so I will not quote one, and the company’s filings list its operations if you want to check the mix yourself.
That diversification stops at the metal. Every mine sells the same product at the same world price, so the price risk is not diversified at all. This is the main difference between owning Newmont and owning a company with many product lines. A dozen mines are a dozen ways to be right about gold at once, and a dozen ways to be wrong at once.
Costs matter too, and here is why I care about them so much: the cost line is where a good year turns into an average one when metal prices stall. The company guided to all-in sustaining costs near $1,680 an ounce for the year, above the $1,621 of the latest quarter. Miners often see costs creep when labor and energy get pricier, and a gold rally usually lifts those inputs too. Margin per ounce is what counts, so I watch the cost line as closely as the price line.
Cash, buybacks and the dividend
The company reported record free cash flow of about $2.2 billion for the quarter, per the Kitco report, and returned about $1.8 billion to shareholders, according to coverage of the earnings call. I could not confirm these against the filing myself, so treat them as reported figures. If they hold, they matter more than any multiple, because free cash flow is what pays for buybacks and what protects the balance sheet when the price turns.
The dividend is small. It is $1.02 a share for a yield of 0.83%, about 13% of trailing earnings. Nobody should buy this for income. The yield is too thin to matter, and the management team seems to agree, given that buybacks got most of the cash. A buyback at a cyclical high is only good value if the price stays high, which is the same bet again.
What the market and the models say
Among 12 analysts covering the name, the average target is $138, about 12% above the price, with a high of $170 and a low of $110. The low target is -11% from the current price, so the most cautious analyst expects a small loss. 92% rate the stock a buy. Agreement that strong makes me a little uneasy, because a crowd that is all on one side has usually priced the good news already.
Our quant grade moved from C to B, which fits a company whose numbers have improved. Short interest is 1.6% of shares, so bears are not stacking up. On the last earnings day, July 23, the stock moved -1.6%, smaller than the average earnings move of 4.8%. A record cash quarter produced a shrug, which suggests those results were expected.
A gold price line I would draw
Short version first.
My judgment is that Newmont is a magnified claim on gold with decent operating discipline, and that the 15.6 trailing multiple describes a good year, not a durable one. I would hold it as a small position that expresses a view on the metal, not as a quiet compounder.
The uncertainty I cannot remove is gold itself. I have no edge in forecasting it, and neither do the analysts who cover the stock. The counter-case to my caution is simple: if gold holds above $4,000 for several years, costs stay near $1,700, and the company keeps buying back stock, then today’s earnings are the floor and 12.6 times forward is cheap.
The number I would watch is realized price minus all-in sustaining cost in the next report. If it stays above roughly $2,500 an ounce, the forward multiple is credible. If it drops toward $2,000, I would expect forward EPS to be cut by a quarter or more, and the stock to lose its low-multiple look overnight.
Analysis and opinion only, not investment advice. Figures come from Newmont filings on SEC EDGAR and its investor site, with quarterly figures as reported by Kitco and Yahoo Finance; valuation multiples are approximate and were checked on September 22, 2026.