It hasn't been a good year for the Newcrest Mining Ltd (ASX: NCM) share price.
Since the start of 2021, the gold miner's shares have fallen 11.5% and now trade at $23.90.
This isn't too far away from the Newcrest share price 52-week low of $21.85.
Is the Newcrest share price good value?
One leading broker that sees a lot of value in the Newcrest share price is Goldman Sachs.
According to a note out of the investment bank this morning, its analysts have retained their buy rating but trimmed their price target slightly to $30.50.
Based on the current Newcrest share price, this implies potential upside of almost 28% over the next 12 months.
Why is Goldman bullish?
There are three key reasons why the broker is positive on Newcrest.
One of those is the company's growth pipeline, which it believes will add value in the future.
Goldman said: "Key growth projects Havieron and Red Chris block cave continue to make significant steps forward. […] Combined, NCM's major project growth pipeline could deliver additional attributable production of ~550koz of gold and ~140kt of copper (~1,350koz Au eq.) per annum when completed, roughly half of NCM's FY21 Au eq. production. We value the projects at US$5.9bn (A$10.3/sh), with an average IRR of ~25%. NCM has the strongest balance sheet in over a decade, enabling it to fund value-accretive growth projects over the next 5-10 years and reducing project risk."
Another reason for the bullish view on the Newcrest share price is its belief that the company's earnings will hold up despite production declines.
It said: "Our supportive copper price view and development of the high-returning Havieron project means that we forecast NCM delivering flat earnings over the next five years on average, despite the known challenge of declining grade at key asset Cadia. NCM's copper contribution will lift from ~23% of revenues in FY21E to 28% by FY25E, and continue to grow as the copper-dominant Red Chris and Wafi Golpu block caves are constructed (39% by FY30E)."
Finally, the broker sees a lot of value in Newcrest shares at the current level. Particularly in comparison to its peers.
The broker explained: "NCM is trading at 0.71xNAV vs. North American gold majors at ~1.2xNAV (FactSet broker consensus)."
