Newmont Soars With A New $60 Price Target, Leads S&P 500 Higher

Newmont Corporation NEM received an upgrade from UBS from Neutral to Buy, setting a 12-month price target of $60 per share. The bank cited a significantly more favorable gold market outlook and the company's improved capital return potential following strategic divestments.

UBS sees gold trading at $3,500 per ounce in 2026, up 23% from its prior estimates. The bank says the macro environment closely mirrors previous periods of financial turmoil, such as the global financial crisis and the COVID-19 pandemic, when gold outperformed following initial selling pressure. Thus, UBS sees gold as increasingly attractive in a world of heightened geopolitical and economic uncertainty.

Newmont, the world's largest gold producer, has underperformed the spot price and the VanEck Gold Miners ETF GDX by roughly 40% over the past five years, leading to a valuation discount.

UBS sees 2025 production guidance of 5.6 million ounces as conservative and believes improving execution could positively surprise the market. The bank's analysts highlighted the post-Newcrest merger divestment plan, which is expected to generate $3.2 billion in cash by Q2 2025.

UBS estimates that $3 billion will be returned to shareholders via buybacks in 2025, creating a compelling high single-digit distribution yield, particularly as the company moves below its $5 billion net debt target in the first half of 2025.

However, operational challenges remain. Newmont has missed production and cost guidance for five consecutive years and its sprawling portfolio across nine countries adds complexity.

Although welcoming Newmont's focus on top assets, UBS sees the "rightsized" gold miners producing 1-2 million ounces annually with 3-5 Tier 1 assets and 1-2 growth projects in the current environment. Newmont's 7.5 million ounces over 11 assets far exceed that, as its efficient management and sustained reserve growth become increasingly complex.

Still, UBS sees strong free cash flow (10% yield in 2026) and potential for additional projects such as Red Chris in British Columbia, although large-scale capex is more likely in 2027–2028. While Newmont has a mixed operational track record, the bank argues that modest improvements in costs or production—if achieved—would represent positive surprises, given conservative market assumptions.

Price Watch: As of 3 PM ET, Newmont was the best-performing S&P 500 stock, rising 9% to $55.53.

Read Next: Why Is Gold Outperforming Bitcoin?

Photo: Shutterstock