Owners of Newmont Corporation (ASX: NEM) shares might be feeling a little disillusioned about how 2024 has treated this ASX gold mining stock.
Sure, Newmont shares have had a decent year on paper. Newmont started the year at $60.53 a share but is currently asking $64.98 (at the time of writing). That means Newmont has gained 7.35% year to date.
However, when you consider that the price of gold itself has gone from roughly US$2,067 an ounce this year up to the current US$2,700 (a gain worth more than 30%), Newmont seems a little shortchanged. After all, gold miners are supposed to be leveraged bets on the price of gold itself.
Other popular ASX gold shares have far exceeded this return. For example, Northern Star Resources Ltd (ASX: NST) stock has risen by almost 20% over the same period. Evolution Mining Ltd (ASX: EVN) has gained 27%, while West African Resources Ltd (ASX: WAF) has rocketed almost 64% higher.
Even the VanEck Gold Miners ETF (ASX: GDX) has gained 27.4% in 2024 so far.
What's more, despite this favourable backdrop, Newmont hasn't even beaten the market this year. The S&P/ASX 200 Index (ASX: XJO) is up more than 8% in 2024 to date, handily beating the Newmont share price.
Check it out for yourself below:
It wasn't always like this, though. As you can see above, Newmont shares were doing well in 2024 – until late October. Between January and 24 October, Newmont stock rose more than 44%. However, the company's third-quarter earnings results spooked investors.
Although Newmont reported a 4% production increase in these earnings, higher costs and misses on key metrics like earnings per share (EPS) dismayed investors. The Newmont share price fell 11% on the day these earnings were released, taking the wind out of the company's momentum.
Are Newmont shares a buy for 2025?
But what about 2025? Will Newmont turn the ship around next year?
Well, one ASX broker thinks there's a good chance that this will happen. Last month, we covered the current views of ASX broker Macquarie on Newmont. Macquarie looked at Newmont shares and decided that the company looked undervalued.
The broker kept its outperform rating on Newmont and gave the gold miner a 12-month share price target of $82. If realised, this would see the Newmont share price climb by close to 26% over the coming year.
Macquarie reckons that the markets have been too harsh on this gold miner. It argues that the recent North American asset sales, worth US$795 million, were a boon for Newmont and took full advantage of the recent highs in the gold price. This, Macquarie reckons, should enable a strong share buyback program next year, which bodes well for Newmont shares.
No doubt, this will be welcomed by Newmont investors today. But we'll have to wait and see if Macquarie is on the money here next year.
