In what might go down as one of the wildest weeks for investors in stocks in recent history, Newmont (NEM -2.58%) stock offered much respite, with solid and steady gains through the week. Shortly after noon ET Friday, Newmont stock hit a weekly intraday high of 26%, according to data provided by S&P Global Market Intelligence. The S&P 500 (^GSPC 1.67%), meanwhile, managed to log 6.1% gains, at its intraday best over the past five trading days, through 2 p.m. ET Friday
Newmont stock is riding the wave of fresh enthusiasm in gold stocks amid the stock market turmoil, with one analyst even upgrading the stock's price target by 20%.
This analyst expects gold prices to rise further
Newmont is the world's largest gold producer, with its mines churning out 6.8 million attributable ounces of gold in 2024. The mining giant also produces silver, copper, zinc, and lead.
As one may guess, Newmont's fortunes depend on commodity prices, and we are witnessing gold's golden days right now. Gold is on fire, with its price hitting a record high this morning and jumping over $3,220 per ounce. Analysts at UBS just predicted gold price to hit $3,500 per ounce in 2026 as investors flock to the yellow metal amid the tariffs and trade war that have triggered fears of a recession.
NYSE: NEM
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At the same time, analyst Daniel Major lifted Newmont stock's rating to buy from neutral and upped its price target to $60 per share from $50 a share. That would mean a 20% upside from the gold stock's closing price of April 10. Major believes Newmont stock could get a lift as the miner achieves its 2025 guidance amid low expectations.
Other gold stocks, however, could rise faster
Newmont stock has hugely underperformed the industry and gold prices in recent years as operational challenges and high costs hit the miner's profits and cash flows. 2024, however, was a strong year for Newmont. Having acquired Newcrest in 2023, Newmont's sales jumped 57% in 2024, and it turned a net profit of $3.4 billion versus a net loss of nearly $2.5 billion in 2023.
Newmont is also cutting debt, and expects to raise net cash proceeds of around $2.5 billion from the sale of some assets this year. A UBS analyst believes the miner could return much of this cash to shareholders in the form of share buybacks.
I'm not too sure here, though. While soaring gold prices should send Newmont's sales up in 2025, I'm still wary about its mining and production costs and expect them to remain high this year. That means other, even smaller, gold stocks, might be able to better exploit gold prices to their advantage and grow faster than Newmont.
