Deutsche Bank has lowered its price target for gold producer, Newmont Mining Corp(NEM) Monday.
The firm has reaffirmed a “Hold” rating on NEM, and has lowered its price target from $59 to $54. This price target suggests a 9% increase over the stock’s current price of $48.94.
An analyst from the firm commented, “guidance for Yanacocha (Peru flagship mine) declining in 4Q12 and beyond. While Yanacocha’s outlook has been winding down for years, we find the timing odd, as Yanacocha contributed a surprisingly strong 3Q12 benefitting from higher mill ore and less leach ore (expected to reverse going forward). According to management, changes in Yanacocha’s output are following 3Q12′s 800 person workforce reductions to “re-level” its size going forward. With output expected at 122k oz for Yanacocha effective 4Q12, we are reducing our estimate for this mine by ~200k oz for 2013 and ~250-300k oz beyond. Our 2012 diluted EPS declines to $3.29 (-8% vs prior) and 2013 cut to $6.03 (-8%) and compare to FactSet consensus of $3.93 and $5.14. On revised earnings outlook, our 12-month PT falls from $59 to $54 and remains based on 9x 2013E EPS and compares to our NPV/share of $53, provided simply as a cross-check.”
Newmont Mining shares were mostly flat during Monday morning trading. The stock is down 18.38% YTD.
The Bottom Line
Shares of Newmont Mining (NEM) have a 2.87% dividend yield, based on Friday’s closing stock price of $48.74. The stock has technical support in the $44-$45 price area. If the shares can firm up, we see overhead resistance around the $53-$55 price levels.
Newmont Mining Corp(NEM) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.
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