Newmont Trades at 9.6x Forward Earnings After 30% Slide

Newmont stock is down 30% from its 2024 peak, pushing the forward multiple to 9.6x earnings. That valuation is among the cheapest in the large-cap gold mining space. The selloff reflects rising costs, a gold price that has struggled to hold above $2,400, and a market that has grown impatient with the company's capital spending cycle, the company said in its quarterly update.

First-quarter cash flow came in below expectations. Newmont's initial plan called for a step-up in free cash flow in the second half. The Q1 number showed working capital absorbing cash as the company built inventory at new sites. Newmont said the full-year guidance remains intact. If management delivers on that outlook, the stock is pricing in a free cash flow yield north of 6% for 2025, a level that historically has marked a floor for the shares, according to the company's investor presentation.

The FY2026 trajectory is visible even without formal guidance. Newmont's long-term plan targets a 15% production increase from current levels by 2027, driven by the ramp at Cadia and the Tanami expansion. The market is discounting that growth. Cost inflation has eaten into margin. The company's all-in sustaining cost guidance for 2025 of $1,450 per ounce leaves a healthy margin at current gold prices, though Newmont has flagged cost creep as a risk.

Covered calls are a natural fit for this setup. The stock's implied volatility sits near 35%, above the 12-month median of 28%, which means option premiums are elevated. The article notes that selling a December 2025 $50 call against a long position yields about 5% in premium, annualized. That makes the trade an income play while waiting for the earnings catalyst. The downside is that the stock caps upside if Newmont rallies hard. The low multiple suggests the stock is more likely to grind sideways than to explode, the author wrote.

AlphaScala's Alpha Score of 63 out of 100 places Newmont in the Moderate zone. The score reflects a cheap valuation relative to earnings. Earnings momentum is negative on a trailing basis. The sector is Materials.

Newmont reports second-quarter earnings on July 24 after the close. The market will look for cash flow improvement and cost containment. If the print shows the margin story is intact, the cheap multiple alone could drive a re-rating, the article said.