Newmont Corp (ASX: NEM) shares have returned almost 100% over the past 12 months, but the team at Macquarie thinks shares in the ASX gold giant still have a way to run.
The Macquarie team has run the ruler over the company's recent quarterly results and has a bullish share price target on the company, which we'll get to shortly.
First, let's look at what Newmont reported.
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Strong cash generation
The gold and other metals producer said last week that it had produced 1.3 million ounces of gold for the first quarter.
Newmont Chief Executive Officer Natascha Viljoen said this led to the company "generating an all-time record US$3.1 billion in quarterly free cash flow, keeping us well on track to achieve our 2026 guidance''.
She added:
Supported by our enhanced capital allocation framework, we have doubled the size of our share repurchase program with an additional US$6.0 billion authorisation, following the full execution of our previous program, under which we repurchased US$2.4 billion of shares since the last earnings call. We look forward to building on this momentum in the second quarter and continue delivering sustainable returns to our shareholders.
As well as the gold produced in the first quarter, Newmont generated nine million ounces of silver and 30,000 tonnes of copper.
The company is guiding to full year production of 5.3 million ounces of gold at an all-in sustaining cost of US$1029 per ounce.
During the quarter Newmont generated US$3.8 billion in cash and delivered US$2.7 billion in shareholder returns through share buybacks and dividends.
Shares looking like good value
Macquarie said in its note to clients following the quarterly report that production and costs hit consensus estimates.
They noted that the company was exposed to higher oil prices, however.
As they said:
NEM's CY26 guidance is based on US$70/bbl Brent oil prices and every US$10 increase is US$60m (or US$12/oz). Therefore, with oil at ~US$110/bbl, that would increase US$240m to NEM's cost base (or US$48/oz) which equates to ~3% increase in NEM's cost base.
Macquarie said management indicated there was only minor damage underground at Newmont's Cadia mine following a minor earthquake.
Overall, Macquarie said it was a good result.
As they said:
1Q was exceptional and demonstrated the exceptional cash generation of the business. We believe the upsized share buyback demonstrates NEM's commitment to capital return to shareholders (as opposed to looking to M&A).
Macquarie has a price target of $192 on Newmont shares compared with the current price of $166.19, implying potential upside of 15.5%.
Newmont also pays a modest dividend, currently yielding about 0.9%.
Newmont is valued at $169 billion.
