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"We believe Newmont has a competitive advantage since it is able, at the higher price levels, to find new projects from within its large land portfolio," JPMorgan analysts wrote in an April 30 report. "The current plan for 35% production growth by 2017 is aggressive but should be achievable while gold prices remain firm. With the current delays at the Conga project, it is looking at other areas in which to expand. Newmont offers optionality since some of the new projects would likely be deferred if gold prices were to decline sharply. Based on our option valuation methodology, NEM continues to appear undervalued. We reiterate our Overweight rating."
Shares of Newmont hit a 52-week low of $44.33 on Tuesday. The stock's 52-week high of $72.42 was set on Nov. 9.
Newmont's forward P/E is 7.95; the average for gold mining companies is 10.75. For comparison,
Royal Gold(RGLD) has a higher forward P/E of 25.55.
Eleven of the 20 analysts who cover Newmont rated it hold. Eight analysts gave the stock a buy rating and one rated it sell.
The stock has fallen 25.9% year to date.
-- Written by Alexandra Zendrian
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