Newmont After the Rout: A Tactical Long While Gold Regroups

Hook & thesis

Newmont Corporation has seen a violent swing over the past month: gold soared to record nominal levels, lifting miners, then reversed with a sharp metal pullback that punished sentiment. The stock has fallen from its January high but sits on fundamentals that still look intact: $7.3 billion of free cash flow, a $135.5 billion market cap and a modest debt load. That combination suggests a tactical long makes sense for traders who want upside exposure to any stabilizing move in metals while keeping risk defined.

My trade thesis is simple: buy a disciplined position in Newmont at current levels around $124.60, target a retest of the recent high near $135.00 within a mid-term window, and protect the trade with a stop at $108.00. The company’s cash generation, low leverage and production guidance cushion earnings even if metal prices soften further, so this isn’t speculation on heroic gold prices - it’s a measured play on mean reversion and solid mining economics.

What Newmont does and why the market should care

Newmont is one of the world’s largest gold producers, operating across North and South America, Australia, Africa and Asia. Its asset base generates significant free cash flow; the latest figures show about $7.299 billion in free cash flow and an enterprise value of roughly $132.9 billion. The company reported a strong Q4 with earnings per share of $2.52 and revenue of $6.82 billion, and management’s guidance calls for roughly 5.3 million ounces of gold production in 2026. For investors, Newmont is a way to play gold and precious metals with the leverage that miners provide to the metal price, plus the upside from operational execution, capital returns and M&A optionality.

Key fundamentals and valuation snapshot

Valuation context: On a trailing P/E of roughly 19x and EV/EBITDA near 10x, Newmont sits at a multiple that is not cheap but not exuberant for a high-quality producer with strong cash generation. The stock is trading close to its 10-day and 21-day moving averages (SMA10 ~$123.60, EMA9 ~$123.31), which supports the case for a mean-reversion trade rather than a value recovery only. The company’s balance sheet is healthy - debt to equity is about 0.15 - which reduces the tail risk of leverage-driven equity collapses should gold remain volatile.

Technical & sentiment backdrop

Short-term technicals are mixed: RSI around 56.6 suggests there’s room to run before overbought conditions, but the MACD shows a slightly negative histogram and the MACD line is tracking below the signal, indicating near-term bearish momentum. Short interest is low relative to float and days-to-cover figures hover around 1.8-2.6, so a squeeze is possible but not guaranteed. Volume spiked on recent selloffs, which indicates participation in the move down; that same participation can work in the opposite direction if gold finds a bid.

Catalysts to watch

• Gold price stabilization or rebound - news on 02/23/2026 showed gold at record nominal highs before a pullback; any reversal would flow to miners quickly.
• Operational updates or upgraded 2026 guidance from management - proof that production will hit the guided 5.3 million ounces would remove execution risk.
• Capital return announcements - continued buybacks or a special dividend would reset investor perception of optionality.
• Macro developments - Fed commentary or geopolitical shocks that reinforce safe-haven flows toward gold.

Trade plan (actionable)

• Trade direction: Long
• Entry price: $124.60
• Target price: $135.00
• Stop loss: $108.00
• Horizon: mid term (45 trading days) - I expect any meaningful metal-price rebound or reconnection to recent highs to play out over several weeks rather than overnight. This window gives the trade room through earnings cadence, Fed commentary and commodity volatility.

Rationale: $124.60 is essentially at current market levels and near short-term moving averages, providing a low-friction entry. $135.00 is a logical target because it roughly matches the 52-week high of $134.88 and represents a clean technical retest. The stop at $108.00 sits beneath support identified by prior pullbacks and provides a capital-protecting fail point if metal prices trend materially lower or if company-specific operational trouble emerges.

Sizing and risk controls

Keep this as a defined portion of portfolio risk given the volatility of miners - think of this as a tactical swing trade, not a portfolio core position. Use position sizing so the loss to the stop is within your maximum risk tolerance (for many traders that’s 1-2% of portfolio value). If you prefer lower downside, scale in with partial positions and tighten stops as the trade moves in your favor.

Counterargument

One valid counterargument is that the move down in gold and silver was driven by a regime shift in macro expectations - namely a hawkish tilt in Fed signaling and political developments that tighten real rates. If real rates rise and remain elevated, gold’s safe-haven bid could weaken substantially. Newmont’s P/E of about 19x and price-to-book near 4.0 leave the stock exposed if metal prices drop meaningfully, and miners are cyclical enough that multiples can compress quickly even for high-quality names.

Risks

• Gold price declines: a sustained move back toward $4,500/oz or lower would hurt revenues and margins and could push the stock below our stop.
• Macro tightening: hawkish Fed policy or stronger-than-expected USD could keep precious metals out of favor and depress NEM.
• Operational/regulatory events: production disruptions, permitting setbacks, or royalties/tax changes in operating jurisdictions can hit results.
• Sentiment-driven selling: miners are high-beta to metals; a broad risk-off wave could produce outsized downside despite solid fundamentals.
• Valuation compression: market could re-rate miners to much lower multiples if consensus shifts on long-term metal demand or capital returns slow.

What would change my mind

I would walk away from this long idea if gold slips below $4,500 and stays there for several weeks, or if Newmont issues guidance that meaningfully cuts 2026 production or reduces buybacks/dividends. Conversely, a sustained gold rebound above $5,200 or a capital-return announcement would make me more aggressive and possibly widen the target toward $150+.

Conclusion

Newmont is not a speculative penny miner; it is a cash-generative, low-leverage large-cap producer. That profile supports a tactical long while metals regain footing. The trade laid out here is a measured bet: enter near $124.60, target a retest of the $135 area within roughly 45 trading days, and protect capital with a stop at $108.00. If you accept the metal-price and macro risk, this trade offers an asymmetric opportunity: limited downside with a clear catalyst pathway to upside.

Trade reminder: size the position so an exit at $108.00 is within your portfolio risk tolerance.