Top broker tips the Newcrest Mining Limited share price to fall 35%

The Newcrest Mining Limited (ASX:NCM) share price could be in danger of a sharp decline according to one leading broker…

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In afternoon trade the Newcrest Mining Limited (ASX: NCM) share price is mostly flat at $21.63.

But as far as one broker is concerned the gold miner's shares could fall significantly in the next 12 months.

What happened?

Following the release of its full-year results yesterday, UBS has released a research note which reiterates its sell rating and places a $14.00 price target on its shares.

Based on its current share price, this would mean a decline of over 35% for its shares over the next 12 months.

Analysts at UBS appear to believe that the gold miner's shares are vastly overvalued.

And they may have a point. With Newcrest posting full-year earnings per share of 40.2 U.S. cents (51.1 cents) yesterday, its shares are currently changing hands at a lofty 42x full-year earnings.

Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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