Newmont (NEM) delivered strong 4Q results, beating consensus on both earnings and free cash flow, though the market was disappointed by higher-than-expected 2026 cost guidance. Positively, the company introduced a clearer capital return framework, committing to return 100% of free cash flow if net cash exceeds $3bn, improving visibility around shareholder returns. Meanwhile, tensions remain with Barrick over the Nevada Gold Mines JV, with NEM issuing a notice of default relating to alleged mismanagement.
Looking ahead, 2026 production guidance of ~5.3Moz was broadly in line with expectations, though costs are forecast to rise meaningfully with AISC guided to ~$US1,680/oz on a by-product basis, roughly $US100/oz above consensus. Much of the increase relates to lower volumes, higher sustaining capex and inventory movements, which may partially reverse over time, though the market will likely wait for evidence of cost improvement before giving credit.
- We felt NEM’s mixed 4Q update removed it as a frontrunner for MM to buy back in when we consider what gold stock (s) to buy.
MM is neutral towards NEM ~$155
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