Newmont Corporation (NYSE:NEM, TSX:NGT, ASX:NEM, XETRA:NMM) remains UBS's preferred large-cap gold miner, with the bank citing clarity on capital returns and a path to growing production per share.
The key overhang on Newmont's investment case, a potential large payment to Barrick to equalize ownership of the Fourmile project in their Nevada joint venture, was resolved in August, the analysts noted.
The two companies consolidated assets outside the JV and settled related litigation for a net $1.95 billion payment from Newmont. Since then, Newmont has outperformed the GDX gold index by less than 5%, which UBS believes still does not reflect the improved outlook.
The bank lifted its price target to $155 per share from $120, with a Buy rating on the stock.
UBS pointed to Newmont's enhanced capital returns framework, which targets net cash of $1 billion to $3 billion and commits 100% of free cash flow above that range to dividends and buybacks.
With net cash above target as of the second quarter, UBS estimates Newmont could return more than $7 billion to shareholders in 2026, a roughly 6.5% distribution yield, while staying within its targeted range even after the Barrick payment.
The bank's more distinctive thesis centers on production per share rather than headline growth. UBS estimates Newmont could cut its share count by 25% by 2030 through sustained buybacks, translating into gold-equivalent ounce growth per share of around 45%, or a 10% compound annual rate, even under a more conservative long-term gold price assumption.
UBS acknowledged Newmont's weak recent track record against production guidance, but said the company's long-life asset base requires less reinvestment than peers to sustain output.
The bank expects Newmont to reinstate multi-year guidance around its fourth-quarter results, which it believes would strengthen confidence in the operational outlook and justify a premium valuation multiple over time.
