Gold has been a standout performer over the past twelve months, rocketing by around 40% to trade near US$3,330 per ounce.
And riding that wave is the world's largest gold miner, Newmont Corporation CDI (ASX: NEM).
On Friday, the mining behemoth posted a quarterly result that appears to have resonated with investors and analysts alike.
It produced 1.48 million ounces of gold during the quarter, coupled with with 36,000 tonnes of copper.
The miner also achieved an average realised gold price of US$3,320 per ounce, marking a US$376 increase from the prior quarter.
In turn, this ASX 200 gold stock reported record quarterly free cash flow of US$1.7 billion – up by 188% from a year ago.
And investors took note with Newmont shares rising by 3.8% in Friday's trading.
Overall, the group has now seen its share price rise by 39% in the last twelve months, reaching A$99.50 apiece at the close of trading on Monday.
But can this rally continue?
Analysts from investment firm Macquarie Group Ltd (ASX: MQG) have chimed in with their views.
Image source: Getty Images
What is Macquarie saying?
According to Macquarie, the outlook remains promising.
It noted that Newmont's gold production during the quarter exceeded the broker's own forecast by 7%.
Macquarie added that production costs – known as AISC – of US$1,593 per ounce clocked in 8% lower than consensus estimates.
And Newmont's net debt of US$1.4 billion came in US$737 million less than the broker expected, with the company citing stronger free cash flow from working capital adjustments.
In response, Newmont expanded its share buyback program by US$3 billion, bringing the total to US$6 billion.
So far, it has repurchased about US$2.8 billion in shares as part of this campaign.
Macquarie believes the full share buyback program could be executed by the end of 2027.
The company also maintained its quarterly dividend at US$0.25 per share, in line with its policy of paying an annual dividend of US$1.00 per share.
So what's the upside?
Looking ahead, Newmont reaffirmed its 2025 gold production outlook of 5.6 million ounces from its 'go forward' portfolio of projects.
However, AISC guidance of US$1,620 per ounce came in below Macquarie's estimate of US$1,710.
The broker also believes that the prospect of revised guidance for the full calendar year could act as a catalyst for Newmont.
As a result, Macquarie has now placed a 12-month target for Newmont shares of A$109 apiece.
This implies 9% upside potential from yesterday's close.
