S&P/ASX 200 Index (ASX: XJO) gold stock Newmont Corp (ASX: NEM) holds the enviable title of being the world's top gold producer.
Newmont was already a diversified gold mining giant before October 2023, when it acquired ASX-listed Newcrest Mining. Following that acquisition, the miner now produces around six million ounces of the yellow metal every year.
And while Newmont's share price gains have outpaced the ASX 200 over the past 12 months, those gains trail the majority of its competitors.
At Wednesday's closing price, the Newmont shares price is up 27.14% since this time last year. That's well ahead of the 11.46% one-year gains posted by the benchmark index.
But it trails the 42.79% gains delivered by the S&P/ASX All Ordinaries Gold Index (ASX: XGD), which also contains some smaller miners outside of ASX 200 gold stocks.
As for 2025, Newmont's share price gains are closely in line with the All Ords Gold Index, with Newmont stock up 10.56% compared to the 11.47% gain posted by the ASX Gold Index.
Newmont shares also trade on a 1.58% unfranked trailing dividend yield.
With this picture in mind, here's why Baker Young's Toby Grimm is bullish on Newmont in 2025 (courtesy of The Bull).
Why this ASX 200 gold stock could outperform in 2025
"Newmont is the world's biggest gold mining company. It also produces copper, silver, zinc and lead. The share price has fallen from $87.35 on October 23, 2024, to trade at $66.34 on January 23, 2025," noted Grimm, who has a buy recommendation on the ASX 200 gold stock.
That broad diversification is the first reason Newmont shares could outperform in the year ahead. The miner produces some 150,000 tonnes of copper and around 230,000 tonnes of zinc a year in addition to its gold production.
In 2024, Newmont shares caught some headwinds after its production levels fell short of estimates. But Grimm believes investors overreacted to the misses and oversold the stock.
"We believe recent share price declines overstate minor production misses and accelerated cost inflation seen in recent quarters," Grimm said, which is the second reason the ASX 200 gold stock could enjoy a strong rebound.
As for the third reason Grimm is optimistic on Newmont's outlook, he said:
Newmont is making excellent progress in selling higher cost operations, which will improve the balance sheet and enhance margins amid expectations of sustained elevated gold prices in 2025.
On Wednesday afternoon, gold was trading for US$2,764 per ounce, up more than 35% in 12 months. A number of analysts are forecasting the yellow metal will break through US$3,000 per ounce in the months ahead.
